Watchdog dismisses fuel politics
The head of the Commerce Commission has dismissed political pressure over petrol prices, insisting a groundbreaking study of the fuel industry will be impartial.
Yesterday the commission said it started its first market study of competition in the retail petrol and diesel industry in New Zealand, a month after changes to the Commerce Act allowing the study.
Commerce Minister Kris Faafoi announced the study this week, after a nomination from Prime Minister Jacinda Ardern, who in October said motorists were being ‘‘fleeced’’.
The comments were made as fuel prices climbed sharply to record levels between July and early October, before dropping sharply since, prompting public debate and calls for particular fuel companies to be boycotted on certain days.
Ardern defended the comments on Monday, clarifying only that the study may take longer than she had hoped.
‘‘They want to do it properly, and I have to let them do their job.’’
Commission chairman Dr Mark Berry, who will leave the role midway through the study, said the body was ‘‘aware of recent concerns’’ over fuel prices, but its role was to provide an ‘‘independent assessment of the level of competition in this market and what factors may be impacting on it’’.
Berry said the team that would undertake the study would do so with an open mind. ‘‘We’re a totally independent, quasi-judicial body. We will simply be analysing the evidence that we get against the relevant tests in the legislation.’’
Petrol companies BP and Z Energy, which owns Caltex in New Zealand, have welcomed the study, asserting that the commission is independent.
Berry would not comment on the public or political pressure on the organisation. ‘‘Political pressure is not an issue which is relevant to us. We will simply be performing our tasks on the evidence that’s available for us.
‘‘Everything that’s happened is behind us; we’re not being politically swayed.’’
In 2015, the commission approved a merger between Z Energy and Chevron (which operates under the Caltex brand in New Zealand), finding that the merger would not substantially lesson competition.
It required the companies to sell some stations and businesses as part of the finding.
Berry denied the finding would make it more difficult for the commission to take an objective position, saying the two studies were quite different. The study would not review whether the decision had turned out to be correct. Berry said yesterday that the organisation expected to be able to complete the fuel study within a year. ‘‘We’re assuming that the oil companies will be cooperating with us.’’
In the coming days the commission will publish a process paper on the fuel study, with a statement of preliminary issues published before Christmas.
The terms of reference published by Faafoi cover competition at multiple levels. The commission is explicitly ‘‘not restricted to’’ the matters named by Faafoi.
The Automobile Association’s spokesman on petrol prices, Mark Stockdale, said the terms of reference were broad.
‘‘That leaves a lot of scope for the Commerce Commission to develop the scope of the inquiry, which is good because there are plenty of issues which the AA has raised that we would like to be covered.’’