Minister warns fuel companies
Energy Minister Megan Woods appears poised to ramp up pressure on the fuel industry, warning a referral to the Commerce Commission is a ‘‘live option’’.
Woods has also ordered officials to bring her an update on the fuel market study ordered by her predecessor, National’s Judith Collins, as soon as possible.
The move is almost entirely symbolic as the report was due to be delivered on November 30, but hints strongly that the new Labour-led Government will at least maintain the growing pressure put on by National.
In February, Collins vowed to ‘‘get to the bottom’’ of rising margins, ordering the Ministry of Business, Innovation and Employment to commission a study.
The study, released in July, complained about the lack of information provided by some parts of the industry, but warned the industry may not be operating competitively.
It also found evidence that Wellington and the South Island may be effectively subsidising the upper North Island, where competition is more fierce.
Since the election, petrol prices have been back in the headlines, with a series of price increases following a sharp drop in the dollar, amid market concerns about the new Government.
Regular petrol in most stations many parts of the country now costs $2.149, the highest in more than three years.
Last week Woods told a BusinessNZ audience that following the issue was one of her priorities in the portfolio, hence the decision to accelerate the timing of MBIE’s analysis of the fuel market study, which will include the detailed response of the industry to the original findings.
‘‘One live option remains referring this to the Commerce Commission,’’ Woods said.
If it is granted new powers to conduct market studies without evidence of collusion, a Commerce Commission probe could compel the fuel companies to release financial information which Mobil and Gull refused to release to the MBIE study.
She also signalled action may be taken in response to a review of the outage of the pipeline which linked Auckland to the fuel refinery at Marsden Point.
‘‘This Government is determined to do more to safeguard vital infrastructure like this.
‘‘Following the Canterbury and Kaikoura earthquakes, there has been an increased focus on disaster resilience.
‘‘I want to ensure that energy policy supports the resilience of communities.’’
Woods has also instructed officials to begin drafting terms of reference of a review of retail prices of electricity, a pledge made as part of Labour’s coalition agreement with NZ First.
While Woods raised concerns about the number of people who had reported difficulty affording to pay power bills or heat their homes, her speech gave little indication of how the review would target pricing, aside from saying the Government would ‘‘look for ways to help make the energy New Zealanders are using more affordable’’.
It would also focus on technologies which are expected to change the nature of the industry.
Draft terms are expected before Christmas, before consultation with the industry.