No fuel cartel conduct in Armidale says ACCC, Launceston study announced

The Australian Competition and Consumer Commission (ACCC) has concluded an investigation into alleged anti-competitive conduct by fuel retailers in the NSW Northern Tablelands city of Armidale and not found evidence of cartel conduct during the course of the investigation. This followed concerns raised late last year regarding high petrol prices.

The regulator said that fuel prices in Armidale remained very stable during the first 40 weeks of 2014, and were observed as being higher than nearby towns. As this type of market behaviour can be an indication of underlying cartel conduct, the ACCC undertook an investigation of Armidale’s retail fuel sites.

“The stable pricing behaviour observed in Armidale is unusual and indicated a general lack of competition. This may have been a symptom of collusion amongst competitors or as the result of a number of other market conditions,” ACCC chairman Rod Sims said.

“In Armidale the most notable factor which could contribute to a lack of competitive pressure on petrol prices is the concentration of ownership across a number of sites.”

“In order to attribute this pricing behaviour to cartel conduct by competitors, there must be evidence of agreements between competitors, and we have not been able to find that here.”

Under the new petrol monitoring arrangements launched by the Minister for Small Business, Bruce Billson, in December 2014, the ACCC will conduct regional market studies to understand why prices are higher in certain regional locations and to identify and explain each component of the prices paid at the bowser.

The ACCC announced Darwin as the location for the first regional petrol market study in March and Launceston as the location for the second study in May.

“Launceston petrol prices are among the highest in Australia. The average annual retail petrol price in Launceston was 162.6 cents per litre (cpl) in 2013-14, some 12cpl higher than the five largest capital cities. This differential has doubled since 2009-10,” Mr Sims said.

Regional fuel market studies may uncover a breach of the Competition and Consumer Act that was not otherwise apparent, Mr Sims added.

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