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

 

Govt confirms petrol price inquiry as pump prices fall

Govt confirms petrol price inquiry as pump prices fall


By Pattrick Smellie

Dec. 3 (BusinessDesk) - The government confirmed it is ordering an inaugural 'market study' into the retail fuel market, just as the price of petrol sinks back towards $2 a litre after a spike through September and October when oil prices were high and the New Zealand dollar was weak.

The study will be the first to be conducted by the competition watchdog, the Commerce Commission, since Parliament gave it new powers to conduct studies into markets where the government is concerned they are insufficiently competitive.

Unlike previous such inquiries, the commission will have the ability to require market participants to provide any information it deems relevant.

A Ministry of Business, Innovation and Employment-commissioned inquiry conducted under the previous National Party-led government concluded that it was not possible to be sure whether there were anti-competitive practices. That study was hampered by variable levels of compliance.

While industry price-leader and the largest fuel retailer, Z Energy, devoted substantial resources on high-quality disclosure, responses from BP New Zealand, Mobil and cut-price operator Gull was variable and incomplete.

Today's announcement comes after Prime Minister Jacinda Ardern's claim on Oct. 8 that New Zealand motorists were being "fleeced" at the petrol pump, at a time when global oil prices were more than US$80 a barrel and the kiwi dollar was below 65 US cents, producing petrol prices that broke records and came close to $2.50 a litre.

Today, Gull is offering 91 octane petrol at just under $2 a litre and Milford Asset Management portfolio manager David Lewis issued commentary suggesting the price per litre could drop another 10 cents a litre, in time for the summer holidays.

His commentary noted there had been 12 price cuts since the 40 cents a litre increase that provoked "driver rage" in October.

However, the market was "not working well for consumers at the moment," Lewis said.

Ardern and Consumer Affairs Minister Kris Faafoi announced the study today, with a date for report back of Dec. 5, 2019.

“This government is committed to easing financial pressure on families,” Ardern said. “New Zealanders deserve peace of mind that the price they’re paying at the pump is fair. At the moment we can’t definitively say whether that is in fact the case across New Zealand so this is a market that most certainly warrants a full investigation.”

Faafoi said there were "existing indications of competition problems in the retail fuel market that are of concern to me, such as the more than doubling of petrol and diesel importer margins over the past decade".

Terms of reference for the study will be issued on Wednesday.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


Stats: Auckland’s Population Falls For The First Time
In the wake of the COVID-19 pandemic, New Zealand’s population growth slowed down with Auckland recording a population decline for the first time ever, Stats NZ said today. “New Zealand saw slowing population growth in all regions... More>>



BusinessNZ: Third Snapshot Report Reveals $9.5 Billion Business Investment In Climate Action

Signatories to the Climate Leaders Coalition have committed to invest $9.5 billion over the next five years to reduce emissions from their businesses, as revealed in their third anniversary snapshot report released today... More>>

Digitl: The home printer market is broken
Printers are more of a security blanket that a serious aid to productivity. Yet for many people they are not optional.
Even if you don’t feel the urge to squirt ink onto dead trees in order to express yourself, others will insist on printed documents... More>>


Retail NZ: Some Good News In COVID Announcements, But Firm Dates Needed

Retail NZ is welcoming news that the Government is increasing financial support for businesses in light of the ongoing COVID-19 lockdown, and that retail will be able to open at all stages of the new “Covid Protection Framework... More>>

ComCom: Companies In Hot Water For Selling Unsafe Hot Water Bottles And Toys

A wholesaler and a retailer have been fined a total of $140,000 under the Fair Trading Act for selling hot water bottles and toys that did not comply with mandatory safety requirements. Paramount Merchandise Company Limited (Paramount) was fined $104,000 after pleading guilty in the Manukau District Court... More>>



Reserve Bank: Robust Balance Sheets Yield Faster Economic Recovery

Stronger balance sheets for households, businesses, financial institutions and the government going into the pandemic contributed towards maintaining a sound financial system and yielding a faster economic recovery than following previous deep recessions... More>>