Much talk, little action on fuel

Jacinda Ardern is careful with how she speaks to reporters. When she thinks the topic you are asking about is not worth exploring, her comments will be so anodyne as to actively pull you away from wanting to publish them.

But when she wants to be quoted the prime minister knows how to phrase something so it will make headlines, as she did on Tuesday when fuel prices once again hit the news. ‘‘I can give New Zealanders a guarantee that we are not going to stand by while they are being fleeced, unlike the last government,’’ Ardern said. National Party leader Simon Bridges responded that ‘‘talk is cheap but petrol prices aren’t’’.

You could be forgiven for checking the date. These lines were trotted out by the same people almost a year ago when the Government introduced the law allowing the Commerce Commission to probe the fuel market. But 2018 was far from the start of petrol pump populism.

Just before the 2017 election, then-energy minister Judith Collins wrote to the fuel industry noting her disappointment with their margins, including her suspicion prices were being boosted for school holidays. This followed a market study Collins commissioned in February of 2017 and then released in July, each time getting some headlines in attacking the fuel companies.

But this whole thing hardly started there either.

In 2015, Collins’ predecessor as energy minister Bridges said he was putting fuel companies ‘‘on notice’’ for their large profit margins. This seemed to be a result of pressure from Labour MP

Stuart Nash, who had been complaining about fuel profits.

You might think that through these four years of seeming

agreement between the two major political parties – a coalition that could outlaw breathing in the next 24 hours if it felt such a thing was necessary – something would have changed. It hasn’t.

There have been no new legislative or regulatory measures over petrol price competition. The main law that has been passed to do something about this took eight months from Cabinet approval to enacted legislation. Petrol taxes, however, usually get passed under urgency. Obviously, new laws that interfere in a massive and complex market shouldn’t be done lightly.

But voters could be forgiven for wondering what is going on. The report released yesterday that prompted this fresh round of ‘‘fleece’’ comments is a draft, and the Government is not planning to seriously act until a final report comes in December.

Any legislative change following it, unless the Government moves much faster than normal, would likely take the best part of a year to be drafted, consulted on, passed through first reading, consulted on again through months of select committees, then passed into law.

This gets us deep into 2020 and often these changes don’t actually hit until the following financial year.

That is, of course, if there is a simple legislative fix. The main problem the Commerce Commission found was the underlying wholesale fuel market, which is almost entirely controlled by a small group of players who also control the infrastructure for getting fuel into New Zealand. These fuel companies are easy to rail against but will make life hell for any government that tries to seriously intervene in their business. They have the power to punish anyone for giving it a go – by raising the prices for all their voters.

Energy Minister Megan Woods defended the pace of her Government’s changes. ‘‘When we came into Government, to use a metaphor on this, we really put ... our foot down,’’ Woods said. ‘‘We made sure we got the Commerce Commission powers extended ... At every point of the way we have hastened this work.’’

Woods said the Government had not been ‘‘sitting around waiting’’ for the final report and had been working on ‘‘parallel work’’ to the final report, which presumably means stuff that could be enacted with speed.

Bridges said getting more competition into the marketplace was ‘‘worth trying for’’ but ‘‘not something that was easy to do’’.

The National leader has turned the attack much more on to the Government and its fuel taxes but that is hardly new ground either. Governments may not have much of an appetite for getting their hands dirty fixing uncompetitive markets. But they certainly feel comfortable having a play with taxes.