Minister attacks fuel price moves
Energy Minister Judith Collins is accusing the fuel industry of ‘‘cynical’’ price changes, as a battle brews over the accuracy of official data.
Yesterday Collins revealed she had written to fuel companies formally registering her disappointment at recent price increases.
Earlier this year Collins ordered a report into the fuel market. Shortly before the study was released in early July, official figures suggested fuel margins plunged, as retailers cut prices.
But in recent weeks the figures have showed margins rising quickly, as retail prices for petrol climbed above $2 a litre for the first time since May.
Earlier this week, the retail price in much of the country were raised by another 3 cents a litre.
Collins has linked the timing of the drop with the release of the study, and the timing of the increase ‘‘to the disappointment of many New Zealanders’’ with the school holidays.
‘‘I would like to formally register my disappointment at this recent reversal in margin declines,’’ Collins wrote.
‘‘The significant drop and more recent margin rises could appear to be a cynical move on the part of the fuel suppliers around the timing of the release of the Fuel Market Financial Performance Study.’’
The fuel market study, conducted by officials at the Ministry of Business, Innovation and Employment (MBIE), didn’t say for sure whether fuel prices were reasonable, but noted ‘‘we have reason to believe that they might not be’’.
Collins warned the fuel companies could face greater scrutiny, with Cabinet approving a plan to give the Commerce Commission more power to conduct detailed market studies, without needing ‘‘actual’’ evidence of collusion.
The change would require the agreement of Parliament.
‘‘I don’t think that the companies should think this is going away,’’ Collins said.
‘‘It is a very serious issue and every one cent margin increases takes $30 million dollars from buyers of petrol and diesel and puts it in the hands of those who are selling it.
‘‘It’s pretty clear that one puts their prices up and they all put their prices up … They’re just watching the prices of each other.
‘‘They’re very quick to go up and they’re very slow to go down.’’
Z Energy spokesman Jonathan Hill said data published by MBIE would suggest the company had faced a sharp decline in margins followed by a bounce.
This was ‘‘completely at odds’’ with the situation the company had seen.
‘‘If Z was to be faced with a collapse in margins to this extent we would be very carefully considering whether or not we had an obligation to inform the market, perhaps by way of a downgrade to earnings,’’ Hill said.
‘‘We have not changed our guidance. Actually, Z’s margin has been fairly constant over this period.’’
Collins dismissed questions about the quality of MBIE’s data.
‘‘I take what they’re saying with a grain of salt, based on the fact that MBIE has no reason whatsoever to provide incorrect advice,’’ she said.
‘‘I think what we’ve got at the moment is something where the prices, the margins have been going up, when everything else tells us they should have been going down.’’
The fuel companies have until the end of September to respond to the fuel market study.