Page 3416 - Week 10 - Tuesday, 17 September 2019
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In our learnings we busted some myths about the fuel market in Canberra. There is no ACT government fuel tax and, unlike Sydney, Melbourne or even Perth, Canberra simply does not have a price cycle. There is no better time, day or week to fuel up in the ACT. Nor do we have a lot of intra-day trading, where fuel prices change at a service station within a day. In fact, fuel prices only change in the ACT once every four or so days. We do have a lack of independents in the ACT, and we do have a visibility problem, where you basically cannot see the price you are paying for fuel until you are pulling up at the bowser.
Industry told us time and again that transport costs contribute a lot to the price we pay in the ACT. Again, I think I can speak on behalf of the committee in saying that we continue to remain sceptical about this being a main contributor, given that prices in other regional cities, including those very close to Canberra, are often much lower than ours.
We also heard that it can be more expensive to set up and do business here. Again, this is something that we think requires more investigation. We know that different sites attract different values and rates, yet fuel prices from the one company paying these different rates and costs can be remarkably similar between sites.
That brings me to the recommendations. As members are aware, once we had received a significant amount of evidence and had all sorts of solutions proposed to us, we tabled an interim report, in late May this year. The report proposed nine possible approaches we were considering recommending, from doing nothing to some quite extreme market interventions. We gave the community, business, government and industry time to assess and respond to those possible approaches. Essentially, we were testing them with the community while we continued to collect evidence.
On the basis of all of the evidence we have received, the committee have decided to reject four of the possible approaches we were considering and recommend five of them. Each decision was agreed unanimously by the committee.
Before I go into the detail, I want to stress that we have been mindful throughout this inquiry that at no point did we want to risk recommending a measure which may potentially result in higher fuel prices for ACT consumers. A number of suggested options put to us carried the risk of higher fuel prices for Canberrans, and the committee has remained concerned throughout the inquiry about the difficulty in forecasting the impact of different options. For this reason we have been deliberately cautious in our approach, and make no apologies for it.
We believe that the agreed recommendations, when implemented and employed together, provide the best likelihood of influencing fuel prices in the ACT in a way which has the best chance of resulting in a fairer outcome for ACT consumers, without risking the ACT consumer having to pay more for fuel. Overall, the theme of the committee’s recommendations is one of creating both greater competition and transparency, with a view to arming consumers with better choice and information in making fuel purchasing decisions.
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