Govt responds to fuel hikes
The Government will rush through changes to the Commerce Act to allow the competition watchdog to investigate the margins on fuel, as the pump price hits a record high.
Prime Minister Jacinda Ardern announced the move at her post-cabinet press conference, saying consumers were being ‘‘fleeced’’ at the pump.
The previously announced legislation will be passed in the first two weeks of sitting in late October. Prime Minister Jacinda Ardern will then nominate that the retail fuel industry is the first to be investigated by the Commerce Commission.
‘‘The study I anticipate will report back next year and I will prioritise a response to it,’’ Ardern said. ‘‘I am hugely concerned at the level of price that consumers are currently paying at the pump for fuel.
‘‘In 2008 we had one of the lowest pre-tax costs for fuel in the OECD. Today we have the highest in the OECD.’’
Ardern said the importer margin on petrol climbed from 7 per cent of the price of petrol in 2008 to 16 per cent in early 2018.
‘‘That increase represents a transfer of wealth from petrol consumers to producers to the tune of hundreds of millions of dollars a year,’’ Ardern said.
‘‘Consumers, in my book, are being fleeced.’’
While the Government was already progressing plans to change the Commerce Act to allow market studies, the legislation was not expected to be completed until late this year or possibly in 2019, and there was no certainty that retail fuels would be the first industry selected.
The former National-led government ordered the Ministry of Business, Innovation and Employment to conduct a study into petrol prices, however two companies – Mobil and Gull – refused to hand over the requested information. Once the law is changed, those companies would be compelled to do so.
AA spokesman Mark Stockdale said the sharp increase in petrol prices this year had left motorists angry, and the Government appeared to be listening.
‘‘This is welcome news. There’s obviously a lot of frustration among New Zealanders about the ever-increasing fuel prices that we’re experiencing now,’’ Stockdale said.
‘‘Motorists are getting quite angry and they’re wanting something done about it, and this shows that the Government is listening and fast-tracking that legislation.’’
National leader Simon Bridges described the move as ‘‘yet another inquiry’’ and called on the Government to axe its fuel tax increases.
‘‘She’s saying consumers are being ‘fleeced’ while her Government is driving up fuel prices and taking hundreds of dollars from Kiwi households through higher taxes on fuel.’’
Bridges added that ‘‘National supports another look at the practices of fuel companies’’.
Although National considered giving the Commerce Commission the powers to conduct market studies, it never did so.
Z Energy, which also supplies the Caltex network, has repeatedly said it supports the commission having greater powers to conduct market studies.
‘‘We are supportive of a Commerce Commission market study that will take the time to fully study the market,’’ a Z Energy spokeswoman said on Friday.
‘‘It’s important to us to have an objective agency who can compel data, with people who have the skills and knowledge to interpret that data and do the work.’’
Yesterday, a Z spokeswoman rejected the claim that motorists were being fleeced. ‘‘We would disagree with that, but we think the market study is the best way to establish that.’’
A low NZ dollar has led to record high petrol prices in recent weeks, with prices for 91 octane averaging $2.41 last month.