Page 3415 - Week 10 - Tuesday, 17 September 2019
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The committee was tasked with inquiring into and reporting on: fuel price methodology and key determinants; characteristics of the ACT fuel market, including historical changes; the impact of fuel prices on the ACT community; reasons for significant pricing discrepancies within the ACT and when compared to other Australian communities and capital cities; consideration of best practice approaches and initiatives in other jurisdictions which have a meaningful impact on reducing fuel prices; and regulatory and legislative solutions and barriers, particularly around competition and retail margins.
I have to remark, and I think I can speak for my colleagues on this committee, that this is one of the most interesting and challenging inquiries that I have been on. Indeed, the inquiry presented a number of challenges for us as a committee. This included competing vested interests and motivations, contradictory evidence and some witnesses who were reluctant or difficult to engage.
It almost became a running theme in the committee that, just when we thought we had exhausted all opinions or information about the fuel market in Australia and the ACT and how it is operating, someone would reveal something new to us. This occurred right until the final weeks.
I want to assure members and the community that the committee has taken significant care in navigating and discerning the different motivations of submitters and witnesses while remaining focused on our aim of understanding the ACT fuel market and proposing meaningful solutions.
I want to thank the ACT community for engaging so meaningfully with the inquiry, and thank the hundreds of people who took the time to fill in our survey and reflect on what impact higher fuel prices have on them, ranging from being simply unfair and an annoyance to extremes of forcing consumers to forgo other goods so that they have fuel in the car. On that note, I will single out Rowena Carpenter, who ended up being the voice of the ACT consumer by not only submitting to us but presenting before the inquiry and explaining the impact on her family, which owns a transport business.
The committee has learned an awful lot about how fuel prices are determined and has been given a great deal of information about the characteristics of the ACT fuel market, some of which we have regarded sceptically. In essence, the ACT has very little control over fuel prices in this market. Fuel prices largely depend on factors which are outside the ACT government’s control—namely, the price of crude oil and macro-economic conditions such as currency exchange rates, production volumes and seasonal demand, many of which are largely outside even the Australian government’s control.
Members may be aware of the drone strikes on Saudi Arabia’s oil infrastructure last weekend, which have already shown signs of affecting other markets, like the US, and may indeed have a global ripple effect. The wholesale price, or the price that companies are paying for fuel at a fuels terminal, typically accounts for 85 to 90 per cent of the retail price that we are paying at the bowser.
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