Page 1265 - Week 05 - Thursday, 25 June 1992
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The Prices Surveillance Authority published a report in 1991 dealing with its survey of Canberra and Sydney prices and that report, although conceding the limited nature of the survey, concluded that in general terms ACT prices were not excessive. Unfortunately, that survey did not capture the notorious pre-Easter price hike which caused much consumer concern that year. Madam Speaker, the Government believes that the PSA study was useful and valuable. The survey pointed to a number of factors which could affect the Canberra price relative to Sydney and other capitals. The survey also recorded many instances of quite large gaps between ACT prices and Sydney prices, and it did find that practices occurred in the Sydney market which sometimes meant that price benefits might not be passed on to consumers in the ACT.
Madam Speaker, more than a year has elapsed since that time and once again we have seen a jump in petrol prices. Recently we have seen petrol rise virtually uniformly across the ACT from 69.9c a litre to 73.9c a litre, when this speech was prepared, and 74.5c a litre uniformly this morning. That rise cannot be wholly accounted for by reference to rises in the wholesale price, which is determined by the Commonwealth Prices Surveillance Authority. In Sydney average prices rose less than in Canberra, even though the wholesale price rises were exactly the same.
The Government believes that the difference in the recent behaviour in the market is that no-one in the Canberra market wants to be competitive. In Canberra, unlike Sydney, the price goes up in unison across the city. I am not talking just about retailers but about competition at all levels of the industry. In Canberra we have a higher proportion of company-owned service stations than is permitted nationally and we see little or no company-led discounting, while in Sydney it is apparent that there is frequent effective discounting at the wholesale level. As the Canberra Times said recently, in an editorial on 11 June:
It is hard to conclude other than that the ACT is a happy market for oil companies, oil distributors and service station managers - a market which gives them maximum returns on their investments. Why should any of them wish to disturb the balance?
Madam Speaker, it is against this background that the Government has decided to introduce this Bill. We are determined to ensure that Canberra consumers are treated fairly. The Government is not introducing this Bill with the idea that the problems involved in the marketing and supply of fuel can all be solved by the stroke of the legislative pen. That is not realistic. There are limits to what government can and should do in the marketplace.
Madam Speaker, the Government is also looking at structural issues affecting the Canberra market through the ACT Petrol Prices Working Group which we established last year. That group is receiving submissions from the industry and the public, and has extended its closing date to 30 June. The policy changes which may result from that inquiry should go a long way to ensuring a competitive market in the ACT in the longer term. The industry tells us that costs are greater in the ACT and that therefore we must always expect to pay higher prices in Canberra. Madam Speaker, we would question that assertion. We have seen these claims in the past applied to the food and grocery industry, and to the liquor and wine retailing industry in the ACT. However, the injection some time ago of competition into those areas by the Franklins and Farmers chains has seen prices in these areas fall and remain comparable to those in Sydney and other capital cities.
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