Investigation into Armidale petrol price drivers

The Australian Competition and Consumer Commission announced that the NSW region of Armidale will be the third location to be studied as part of the petrol monitoring arrangements and will examine petrol price drivers at a local level.

The petrol monitoring arrangements were launched by the Minister for Small Business, Bruce Billson, in December 2014.

The ACCC said that these detailed regional market studies aim to explain each component of the prices paid at the bowser to understand why prices are higher in some regional locations.

The competition regular said it concluded an investigation on 18 May 2015 into whether there were any anti-competitive agreements between fuel retailers in Armidale. It did not find evidence of cartel conduct and subsequently ended its investigation.

“Armidale petrol prices are among the highest in New South Wales. The average retail price of unleaded petrol in Armidale was 144.7 cpl in 2014-15, which was 10.6 cpl higher than the five largest cities (Sydney, Melbourne, Brisbane, Adelaide and Perth),” ACCC chairman Rod Sims said.

“Furthermore, prices in Armidale have been noticeably higher than nearby cities in recent years.

“This study will not only help us all to understand why petrol prices in Armidale are so high, but it will likely provide some understanding of why petrol prices in other regional locations in NSW are as high as they are,” Mr Sims said.

“We may also uncover a breach of the Competition and Consumer Act that was not otherwise apparent.”

The ACCC commenced its first regional market study in Darwin in March 2015 and its second in Launceston in May 2015. It expects to report on these market studies by the end of 2015.

“Our previous price monitoring work had a strong focus on explaining the common price drivers across Australia. Under the new petrol price direction we are now examining the price drivers that explain what is happening at a local level,” Mr Sims said.

Companies throughout the supply chain will be required to provide information to the ACCC under the compulsory information gathering powers it has under section 95ZK of the Competition and Consumer Act 2010.

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