Fuel supply co-operation can continue, says ACCC

Major oil refineries and peak industry body should be allowed to continue to co-operate on fuel supply measures during the prolonged decline in fuel demand arising from COVID-19, the consumer watchdog said.

The Australian Competition and Consumer Commission initially granted approval for major companies and the Australian Institute of Petroleum (AIP) to discuss and enact measures to ensure continued fuel supplies throughout the pandemic and lockdown measures in April.

The agreement has allowed AIP members and crude oil and refined fuels suppliers, importers and those operating storage facilities, as well as logistics, trucking/delivery services and wholesalers to work together to secure supplies. And for the AIP to make arrangements regarding fuel supplies across Australia.

Oil refineries BP Australia, Caltex Australia, Mobil Oil Australia and Viva Energy Australia are included in the authorisation. The agreement does not allow for any co-ordination on fuel prices.

The ACCC last week announced a proposal for the agreement to continue for at least six months from the date of the final determination, citing the continued and significant decline in demand for jet fuel and petrol and the possibility for disruptions to international supply chains for imported fuel. As well as the public benefits of the arrangement.

The applicants had initially requested the conduct be authorised for 12 months, however the ACCC said they were not assured the extended period would be required.

“We believe that allowing fuel companies to coordinate the scheduling of importation, storage and delivery in these exceptional times will provide the fuel sector with more capability to help ensure security of supply of fuel products in Australia, and minimise the risk of shortages,” ACCC Commissioner Stephen Ridgeway said.

“In assessing these COVID-19 applications, we have been seeking to ensure that the disruption caused by the pandemic is being dealt with effectively through coordination, while at the same time avoiding any long-lasting or structural changes in markets.”

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