Pumped Up Petrol Prices Must End

Following on from last year’s inquiry into petrol prices, the A.C.C.C. has once again chastised the oil companies. In the days leading up to the Australia Day long weekend, and also just before Christmas, the pump price of petrol swung upwards, out of step with the Singapore benchmark oil price. The chairman of the Commission, Graeme Samuel, has slammed the oil companies for not only failing to pass on savings from a fall in the international oil price, but also for presenting excuses that he says are disingenuous.

According to two of the oil companies, breakdowns and maintenance problems at their refineries caused the price spikes. Now this is so see through that it’s a joke. Such a situation might cause supply problems for an individual company, but all their competitors would still have ample supply and no reason to pump up the price. Everybody knows that the price goes up before public holidays purely to take advantage of the higher demand.

Mr. Samuel is planning to meet the CEOs of the big oil companies one by one and impress upon them the potential difficulties that they are inviting. More importantly, Mr. Samuel has hinted strongly at moves to change the landscape on the competitive playing field. He has indicated that steps have already been taken towards introducing new and independent competition at the wholesale level.

Where the threats of public condemnation and government supervision haven’t been able to do the trick, it is to be hoped that genuine competition will.