Transcript – Interview with Luke Grant, 2GB
Monday, 12 January 2015
Subjects: Fuel prices, ACCC Fuel Monitoring Report
Minister for Small Business is Bruce Billson, who is on the line. Happy New Year!
Happy New Year to you Luke and to your listeners.
That’s ridiculous isn’t it? $1.52 – what’s that all about?
Fuel prices are all over the place and that is part of the frustration that motorists have. That is why I have given new powers to the ACCC to more closely and specifically monitor what is going on in certain markets and in a more timely way – give us that information quarterly, rather than annually.
Then where these -let’s be kind – ‘curiosities’ arise that cannot be explained, do a deep dive, find out what is going on.
We have seen crude oil prices come down and we have seen in some markets the fuel price come down quite smartly following that reduction in crude oil price, but then in other regions the price reductions have come through at a glacial pace and this is why we think market forces alone are not enough to ensure motorists get efficient pricing and get their interests protected.
That is why we have given a new direction to the ACCC.
Jim said it doesn’t matter who you talk to and Barnaby Joyce rang in last week and now I’m speaking to you Bruce, it will be all talk, no action.
This is just like Fuel Watch under the Rudd Government. You get hot under the collar about something as obvious as $1.06 in Sydney, $1.52 in Cloncurry – it is a joke, it is a rip off, it is disgusting but Government can do nothing about it.
Not sure that is right.
Two things – one, Governments do not set fuel prices, so for people looking to have Government set fuel prices, that is not what we do.
But we do know in some areas where you have got vigorous independents for instance, you saw this in Sydney, it was the independents that drove down the fuel price because they recognised they were going to compete hard for the motorist’s dollar and you see prices change accordingly.
In other areas where you might just have one or two of the majors, they have been less responsive to motorist demands.
What we are keen to do is not have this once a year report that is a gripping read for people that want to do a retrospective on all that has happened during the year, but something that is quarterly, more timely in terms of seeing where these anomalies appear and then have this deep dive power where we can actually peel back, put a spotlight on what is actually going on – where the margins are being made in the fuel supply system – and then work out why some markets are behaving differently to others.
It would be the obvious thing in a small place like Cloncurry, if there are two operators and their prices go up and down on the same days, hello? That is a problem!
The other thing surely is this – in Cloncurry, in Coonamble, in other parts of Australia, there’s a bloody drought. Farmers are losing; having to walk off their property and these fleas think it is okay to charge 50 cents a litre to transport fuel to the middle of Queensland. Bruce, it is wrong.
This is why we need this new direction and why I have given it to the ACCC.
We see regional centres Luke, that are roughly the same distance from terminals, with roughly the same volume of fuel going through those communities, so it can’t be a volume related issue, with spectacularly different fuel prices.
Motorists want to know why.
That is why we have given the ACCC the power to go and hoover up the relevant information, look at who is making the dollars in the supply chain and put a spotlight onto these abnormalities in the way prices of fuel are confronting motorists.
In some areas, it is distinctly a lack of competition and you have got a couple of people taking advantage of a very strong market position.
Now, if our work does nothing more than says to other independent fuel retailers: here is a red hot opportunity for you to take a big chunk of market share; well that is a good outcome.
If it empowers motorists to know what the fuel price cycle is likely to do and when it is best for them to fill up; that is a good outcome.
If there is someone up to mischief and our deep dive reveals that then the ACCC has got additional tools available to it to follow up with enforcement action.
Let’s hope they do. Bruce, I’m about to hit the news, good to talk again mate. We’ll talk again because I’d like to know what ends up in that hoover once the ACCC do their best. Thank you, Bruce.