Hon Lianne Dalziel
Minister of Commerce, Minister for Food Safety,
Associate Minister of Justice, MP for Christchurch East

28 August 2008 Media Statement


Dalziel welcomes petrol price monitoring changes

Commerce Minister Lianne Dalziel today welcomed changes to the Ministry of Economic Development's monitoring of petrol price importer margins as recommended in a recent independent study of petrol pricing in New Zealand.

When the study was released earlier this month Lianne Dalziel said she would ask the Ministry of Economic Development to deliver on the key finding that more transparency about the makeup of importer margins, and a move to report daily margin movements, would be useful for consumers.

"I am pleased that this information is now available to New Zealand motorists and other fuel users," Lianne Dalziel said.

"Although the study only took account of petrol, the new monitoring data also covers diesel which has been subject to recent scrutiny with regard to importer margins.

"The government will ensure that the possibilities for more and better monitoring continue to be examined and are delivered by officials if appropriate."

Background
The key findings of the study* were:

• The New Zealand petrol market is fundamentally competitive.
• Retail petrol prices are not fast to rise and slow to fall.
• Recent price increases are mainly due to increases in crude oil.
• A Fuelwatch scheme like Australia’s wouldn’t benefit consumers, because our market works differently.

The study built on work carried out as part of the Australian Competition and Consumer Commission report on the price of unleaded petrol, and considered implications for the New Zealand market. The report focused on commercial aspects and highlighted areas requiring further assessment.

The study confirmed the reality that petrol prices are set according to the international marketplace – 85% of price increases between January 2007 and June 2008 were due to increases in crude oil prices. New Zealand has the fifth lowest petrol prices in the OECD and the fifth lowest taxes.

The report also showed that there was scope for more transparency about the makeup of importer margins - the difference between the retail price (less taxes and duties) and the landed cost of the refined product. This information now appears on the MED website, www.med.govt.nz.

* The Hale & Twomey report, commissioned by the Ministry of Economic Development (MED) is available on the MED website,
http://www.med.govt.nz/nzpetrolpricereview

ENDS

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