The Australian Competition and Consumer Commission has today announced major oil refiners and the Australian Institute of Petroleum can continue to cooperate to secure fuel supplies until March next year.
The decision was made due to the ongoing impacts of the pandemic on both domestic fuel supply, the drop in fuel demand and the potential for ‘major disruptions’ to both domestic and international supply chains.
It will allow the AIP, Caltex Australia, Mobil Oil Australia and Viva Energy to coordinate and review the capacity for both refining and fuel storage and follows feedback collected by the ACCC on their interim authorisation of the arrangement, granted in April. It does not allow for any price agreements.
“We believe that allowing fuel companies to coordinate fuel delivery, processing and storage if there is a critical supply disruption as a result of the pandemic, will support the fuel sector to ensure the supply of fuel products in Australia is secure and reliable, and reduce the risk of shortages,” ACCC Commissioner Stephen Ridgeway said.
Mr Ridgeway added the benefits of ensuring a secure fuel supply to Australian businesses and consumers through the arrangement outweighed any concerns over reduced competition.
“While we acknowledge there are some risks the conduct may reduce competition, the limited scope and duration of the authorisation, and the reporting conditions mean the risk is low.”
The watchdog did, however, only authorise the arrangement for six months, rather than the 12 months sought by the applicants, stating it believes the impacts will lessen within six months and a full year would risk exacerbating any potential long-term impacts.