Petrol firms face profits inquiry
Petrol companies will have to front up on why Wellington motorists face much higher prices than those in Wairarapa or Horowhenua, after Energy Minister Judith Collins confirmed a Government inquiry into fuel margins.
After growing calls from the AA and the Opposition, Collins tasked officials at the Ministry of Business, Innovation and Employment (MBIE) with undertaking an inquiry into whether the fuel industry is making ‘‘super-normal profits’’.
Officials are expected to report back to Collins by June.
Figures published by MBIE suggest fuel margins have more than doubled in five years, and although Collins said the figures were disputed, the industry needed to answer basic questions about why fuel prices varied so much from one town to another.
‘‘What I think the public wants to know, as do I, is why are prices for fuel so much more expensive in Wellington than in Levin, for instance?’’ Collins said.
While Wellington is close to a major import point at Seaview in Lower Hutt, motorists pay up to 30 cents a litre more than those in towns such as Masterton and Levin, despite the regional centres seemingly facing higher costs to transport fuel to stations.
Levin and Masterton have stations supplied by discount retailer Gull, leading to suspicions from the AA that the major petrol companies are using extra large margins in Wellington and major centres in the South Island to cover discounts in the upper North Island.
Collins spoke to the petrol companies on Wednesday about the inquiry and said the response was ‘‘universally welcoming’’, adding that the industry would be aware that a lack of co-operation would lead to a ministerial inquiry.
AA spokesman Mark Stockdale welcomed the inquiry, saying it could answer questions motorists were asking.
‘‘Motorists in Wellington paying 30c a litre more than in Levin, understandably ... think they are being rorted,’’ he said.
Z Energy chief executive Mike Bennetts said it welcomed the ‘‘clarity’’ the study would provide, promising full participation.
But the company, which also supplies the Caltex network, warned MBIE’s assessment of margins did not account for the full degree of discounting which occurs.
‘‘Given changes in the market relating to discounting over the last couple of years the timing lag in the official monitoring data presents a misleading picture,’’ Bennetts said.
BP and Mobil issued brief statements saying they would co-operate with the investigation.