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Australia investigating service stations for possible failure to pass on oil plunge
[SYDNEY] Australian authorities said on Thursday they would start investigating petrol stations without warning for possible price fixing after a lawmaker accused some of failing to pass on huge falls in the oil price to consumers.
The probe will put additional pressure on firms like Chevron Corp and its half-owned retail subsidiary Caltex Australia, Britain's BP and Dutch Vitol which dominate Australia's service station industry.
It may also impact large domestic retailers like supermarket companies Woolworths Ltd and Wesfarmers's Coles, which run customer loyalty programmes that rely on fuel discounts.
Already they have watched the price of petrol that consumers pay at the pump slide by more than a third since July last year as the spot price of oil plunged amid concerns of global oversupply.
But the Australian government earlier this month said service stations in some regional areas seem to have cut prices by less than those in cities, where there is more competition, and ordered a three-year investigation into how they decide prices.
On Thursday, the Australian Competition and Consumer Commission said it would use its compulsory information gathering powers to produce eight reports a year on petrol pricing, up from one currently, noting that the gap between regional and city prices has tripled since July. "That is very hard to understand and we are very concerned about that," ACCC commissioner Rod Sims told reporters. "Whatever justification there is for the gap between city prices and rural prices, once you get a reduction in the international price of petrol, that should flow on generally throughout the country." A Caltex spokeswoman told Reuters that the ACCC's own analysis had found petrol price moves in regional locations tend to lag those in larger cities because of slower product turnover, and "this phenomenon is again being seen".
A BP spokeswoman said the company had supported the ACCC's fuel price monitoring program since it started producing annual reports in 2008, while a Coles spokesman said the company's service station business welcomed the investigation.
Spokespeople from Woolworths and Vitol declined to comment.
Petrol pump prices are not regulated in Australia but the ACCC has used anti-cartel laws to fight price fixing by large players.
In August last year, the regulator launched Federal Court action against petrol price information service Informed Sources and several retailers, alleging they were collaborating on price movements.
Informed Sources has maintained it is a private company which collects information from its own surveys and petrol retailers, based on publicly available information.