ACCC announces first regional petrol market study in Darwin

The Australian Competition and Consumer Commission has announced Darwin as the first regional location being studied under the new petrol monitoring arrangements launched by the Minister for Small Business, the Hon Bruce Billson MP, in December 2014.

The aims of the regional market studies are to get to the bottom of why prices are higher in certain regional locations and to identify and explain each component of the prices paid at the bowser.

“Petrol prices in Darwin are among the highest in Australia. Annual average retail petrol prices in Darwin in 2013-14 were around 170 cents per litre, which was almost 20 cents per litre higher than in the five largest capital cities,” said ACCC chairman Rod Sims.

“Petrol prices in Darwin are consistently higher than in Katherine, which is far smaller and more than three hundred kilometres inland. Furthermore, the differential between Darwin prices and prices in the five largest capital cities has increased in recent years,” Mr Sims said.

The ACCC will examine petrol markets in at least a further two regional locations by the end of the year and will announce the next two regional locations to be selected for a market study over the coming months.

“Our previous price monitoring work has been done at a macro level, to explain the high level price drivers. Under the new petrol price direction from Minister Billson we are now examining the prices drivers at a local level,” Mr Sims said.

“We see three potential benefits from these ‘deep dive’ regional market studies. First, simply providing greater transparency will empower. Second, we could make recommendations for change to some tier of government. Third, we may find a breach of the Competition and Consumer Act that was not otherwise apparent.”

The ACCC is using its compulsory information gathering powers under Section 95ZK of the Competition and Consumer Act to require information from fuel companies at every level of the supply chain leading into Darwin.

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