Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Regulation of petrol prices doesn’t work, says expert

Regulation of petrol prices doesn’t work, says expert

Jan. 24 (BusinessDesk) – A visiting competition expert says regulating petrol prices doesn't work, and that international attention is now turning to the role refineries play in the industry.

Justus Haucap, who holds the chair of competition theory and policy at the University of Dusseldorf, told a seminar in Wellington of an economic laboratory experiment he was involved with to shed light on the issue.

The experiment tested the Austrian, Luxembourg and Western Australian regulation regimes.

In Austria, the price of petrol can only be increased in the morning but cuts are always possible. In Luxembourg, margins are regulated, and in Western Australia only one price change is allowed per day.

“The Austrian and Luxembourg pricing rules actually tend to increase the profit of the operating companies,” he said.

The Western Australian regime didn’t do any harm but also didn’t provide any benefit.

“We got an uneasy feeling about implementing the Austrian rule in the German market after this result, even though it is only experimental evidence,” he said.

He said care had to be taken in making policy conclusions from economic laboratory experiments.

But the broad policy conclusion was that pricing rules would not solve the problem of competition in petrol price-setting.

The German cartel authority had now turned its attention to the wholesale market which supplied petrol stations. There were “quite funny stories” that suggested the use of market power, including by refineries, he said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: NZ Wool Exports Jump To The Highest In More Than A Decade

New Zealand wool exports jumped to their highest level in more than a decade in June, aided by a lower currency and strong demand from China, the nation’s largest market. More>>

ALSO:

Surreal Estate: Home Values Rise At Fastest Rate In Seven Years

The latest monthly QV House Price Index shows that nationwide residential property values for July have increased 10.1% over the past year which is the fastest annual rate since 2007... The Auckland market has increased 18.8% year on year. More>>

ALSO:

New Employment Laws: Talley’s AFFCO Workers To Strike

The decision comes after the Talley’s owned company walked away from mediation last week and applied to end bargaining under the government’s new employment laws - the first such application since the law came into effect. More>>

ALSO:

Private Action: Employer Pleads Guilty Over Forestry Death

The CTU has always known that the death of forestry worker Charles Finlay was due to the poor health and safety practices of his employer... "The CTU, with the support of Charles’s family, needed to take this ground breaking private prosecution." More>>

ICT Innovation: Six NZ Finalists In World Summit Awards

The awards are a global showcase of 40 projects, across eight categories, with a special emphasis on those which show the benefits of information and communication technology for the development of communities. New Zealand has finalists in six of the eight categories. More>>

ALSO:

Final Frontier: Rocket Lab And NASA Sign Commercial Space Launch Agreement

Rocket Lab has signed a Commercial Space Launch Act Agreement with the National Aeronautics and Space Administration (NASA). The agreement enables Rocket Lab to use NASA resources - including personnel, facilities and equipment - for launch and reentry efforts. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news