Watch­dog dis­misses fuel pol­i­tics

Marlborough Express - - FRONT PAGE -

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.’’

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