Published Monday, 22 January, 2007 at 11:06 AM
Deputy Premier, Treasurer and Minister for Infrastructure
The Honourable Anna Bligh
Queensland blitz on petrol rorters
21 January 2007
The State Government has ordered a crackdown on petrol retailers who may be rorting Queensland’s 8.3 cents a litre fuel subsidy scheme.
Acting Premier, Treasurer and Minister for Infrastructure Anna Bligh has also called on the country’s top consumer watchdog to investigate claims the big oil companies are ripping off Queensland road users by setting their wholesale petrol prices in Queensland higher than they do in other states that don’t have a fuel subsidy.
Ms Bligh said the average difference in the price for unleaded fuel in Sydney and Brisbane during the past six weeks was only 4.5 cents a litre and the Queensland Government wants to know why.
“So we are taking a two pronged approach to try and get to the bottom of the recent fuel price dilemma,” Ms Bligh said.
“We have established a special task force at the Office of State Revenue to check petrol retailer’s books and ensure the fuel subsidy is reaching road users.
“The crackdown will be led by a principal auditor and 10 experienced field investigators and will operate over the next three to six months.
“Queensland Treasury regularly monitors petrol prices and while there are fluctuations from time to time our analysis shows Queensland motorists do get the benefit of Queensland’s fuel subsidy.
“But the price differences experienced during the holiday period have persisted longer than we would normally expect and we want to know why.
“There are stiff penalties for retailers who are not passing on the full subsidy. They can be fined up to $15,000 or have their retail licence cancelled.
“I have also called on the Australian Competition and Consumer Commission to use its investigative powers at a national level to get to the bottom of this apparent anomaly in fuel pricing between Sydney and Brisbane.”
Ms Bligh called on the Australian Competition and Consumer Commission to investigate the subsidy issue in a letter to Chairman Graham Samuel.
“The Queensland Government appreciates the recent efforts made by the Commission to place public pressure on the major oil companies to pass on the drop in world oil prices to motorists,” Ms Bligh said.
“The Queensland Government has special interest in petrol prices because of our State subsidy.
“We are stepping up our own audit and compliance measures to ensure the retailers are passing on the full subsidy to consumers,” Ms Bligh said.
“We want to make sure the Queensland Fuel Subsidy Scheme is doing what it is intended to do - cutting petrol prices at the pump.
“The feedback the Queensland Government is getting suggests something is wrong and this feedback is supported by the publicly available data on capital city fuel prices.
“When you consider Queensland has an 8.3 cents a litre fuel subsidy scheme the difference in capital city prices just doesn’t add up.”
“Queensland pays the fuel subsidy payment directly to retailers to limit opportunities for the subsidy to be eroded in the process of passing it down the petrol distribution chain.
“The Queensland Government routinely monitors fuel retailer’s books and a similar crackdown in 2003 found no evidence of rorting.
“But given the recent fuel price anomalies it is important to ensure that Queensland retailers continue to pass on the full subsidy.
“There are presently 1017 licensed retailers in Queensland operating from 1840 active retail sites.
“I am also mindful that petrol retailers are largely captive to the pricing policies of the large oil companies.
“Given the national dimensions of this issue I have also asked the ACCC to inquire into it on behalf of Queensland motorists.
“I want them to specifically look at the difference between Brisbane and Sydney prices and advise the Queensland Government on any issues in relation to the conduct of the major oil companies.
“If an ACCC inquiry identifies any problems the Queensland Government will pursue the issues vigorously with the oil companies,” Ms Bligh said.
Media contact: Steve Keating 0408 720 081 John Algate 322 45982
Original Letter signed and dated 18 January 2007
Mr G Samuel
Chairman
Australian Competition and Consumer Commission
GPO Box 520
MELBOURNE VIC 3001
Dear Mr Samuel
As you are acutely aware, there are currently heightened levels of community concern in respect of petrol prices, centred around the failure of retail prices to reflect the fall in world oil prices that has taken place over recent months.
The Queensland Government appreciates the recent efforts made by the Commission to place public pressure on the major oil companies to address this issue. The Queensland Government has long advocated for enhanced powers for the Commission in respect of petrol prices.
The Queensland Government of course has a special interest in petrol prices by virtue of the Queensland Fuel Subsidy Scheme. The Queensland Government provides a retail petrol subsidy of 8.3 cents per litre to lower prices for consumers. No other State provides such a comprehensive subsidy.
The feedback the Queensland Government is receiving suggests not only a failure of the oil companies to pass on reductions in the benchmark price at a national level, but also a reduction in the average differential between petrol prices in Queensland relative to other States. This feedback is supported by publicly available data on capital city fuel prices. For example, in the last six weeks the average differential in the price of unleaded fuel in Brisbane and Sydney was only some 4½ cents per litre.
The Queensland Fuel Subsidy Scheme is backed by an audit and compliance program to ensure that the benefit of the subsidy is passed on. This audit activity occurs at the retail service station level as it is retail service stations that receive the subsidy payment. The decision to make the subsidy payment direct to retailers was made to limit opportunities for the subsidy to be eroded in the process of passing it down the petrol distribution chain.
The Queensland Government has no evidence to suggest that the reduction in the price differential is due to a failure on the part of retailers to pass on the subsidy. Nonetheless, I have already requested that the Office of State Revenue increase its compliance efforts.
However, I am also mindful that petrol retailers are largely captive to the pricing policies of the oil majors through the levels of pricing support they provide. Therefore, the reduction in the petrol price differentials in capital cities may not be a reflection of pricing decisions at the service station operator level.
Accordingly, given the national dimensions of this issue, and in the context of the Commission’s recent public statements on the current pricing practices of oil companies, I would appreciate your advice on reasons for the corresponding reduction in the differential between Brisbane and Sydney retail prices.
Of course, your advice may raise issues which the Queensland Government needs to pursue directly with the oil companies. On this point, I can assure you that the Queensland Government stands ready to play its part in trying to achieve fairer petrol prices for consumers.
Yours sincerely
Anna Bligh MP
Acting Premier and Minister for Trade,
Deputy Premier, Treasurer
and Minister for Infrastructure
The State Government has ordered a crackdown on petrol retailers who may be rorting Queensland’s 8.3 cents a litre fuel subsidy scheme.
Acting Premier, Treasurer and Minister for Infrastructure Anna Bligh has also called on the country’s top consumer watchdog to investigate claims the big oil companies are ripping off Queensland road users by setting their wholesale petrol prices in Queensland higher than they do in other states that don’t have a fuel subsidy.
Ms Bligh said the average difference in the price for unleaded fuel in Sydney and Brisbane during the past six weeks was only 4.5 cents a litre and the Queensland Government wants to know why.
“So we are taking a two pronged approach to try and get to the bottom of the recent fuel price dilemma,” Ms Bligh said.
“We have established a special task force at the Office of State Revenue to check petrol retailer’s books and ensure the fuel subsidy is reaching road users.
“The crackdown will be led by a principal auditor and 10 experienced field investigators and will operate over the next three to six months.
“Queensland Treasury regularly monitors petrol prices and while there are fluctuations from time to time our analysis shows Queensland motorists do get the benefit of Queensland’s fuel subsidy.
“But the price differences experienced during the holiday period have persisted longer than we would normally expect and we want to know why.
“There are stiff penalties for retailers who are not passing on the full subsidy. They can be fined up to $15,000 or have their retail licence cancelled.
“I have also called on the Australian Competition and Consumer Commission to use its investigative powers at a national level to get to the bottom of this apparent anomaly in fuel pricing between Sydney and Brisbane.”
Ms Bligh called on the Australian Competition and Consumer Commission to investigate the subsidy issue in a letter to Chairman Graham Samuel.
“The Queensland Government appreciates the recent efforts made by the Commission to place public pressure on the major oil companies to pass on the drop in world oil prices to motorists,” Ms Bligh said.
“The Queensland Government has special interest in petrol prices because of our State subsidy.
“We are stepping up our own audit and compliance measures to ensure the retailers are passing on the full subsidy to consumers,” Ms Bligh said.
“We want to make sure the Queensland Fuel Subsidy Scheme is doing what it is intended to do - cutting petrol prices at the pump.
“The feedback the Queensland Government is getting suggests something is wrong and this feedback is supported by the publicly available data on capital city fuel prices.
“When you consider Queensland has an 8.3 cents a litre fuel subsidy scheme the difference in capital city prices just doesn’t add up.”
“Queensland pays the fuel subsidy payment directly to retailers to limit opportunities for the subsidy to be eroded in the process of passing it down the petrol distribution chain.
“The Queensland Government routinely monitors fuel retailer’s books and a similar crackdown in 2003 found no evidence of rorting.
“But given the recent fuel price anomalies it is important to ensure that Queensland retailers continue to pass on the full subsidy.
“There are presently 1017 licensed retailers in Queensland operating from 1840 active retail sites.
“I am also mindful that petrol retailers are largely captive to the pricing policies of the large oil companies.
“Given the national dimensions of this issue I have also asked the ACCC to inquire into it on behalf of Queensland motorists.
“I want them to specifically look at the difference between Brisbane and Sydney prices and advise the Queensland Government on any issues in relation to the conduct of the major oil companies.
“If an ACCC inquiry identifies any problems the Queensland Government will pursue the issues vigorously with the oil companies,” Ms Bligh said.
Media contact: Steve Keating 0408 720 081 John Algate 322 45982
Original Letter signed and dated 18 January 2007
Mr G Samuel
Chairman
Australian Competition and Consumer Commission
GPO Box 520
MELBOURNE VIC 3001
Dear Mr Samuel
As you are acutely aware, there are currently heightened levels of community concern in respect of petrol prices, centred around the failure of retail prices to reflect the fall in world oil prices that has taken place over recent months.
The Queensland Government appreciates the recent efforts made by the Commission to place public pressure on the major oil companies to address this issue. The Queensland Government has long advocated for enhanced powers for the Commission in respect of petrol prices.
The Queensland Government of course has a special interest in petrol prices by virtue of the Queensland Fuel Subsidy Scheme. The Queensland Government provides a retail petrol subsidy of 8.3 cents per litre to lower prices for consumers. No other State provides such a comprehensive subsidy.
The feedback the Queensland Government is receiving suggests not only a failure of the oil companies to pass on reductions in the benchmark price at a national level, but also a reduction in the average differential between petrol prices in Queensland relative to other States. This feedback is supported by publicly available data on capital city fuel prices. For example, in the last six weeks the average differential in the price of unleaded fuel in Brisbane and Sydney was only some 4½ cents per litre.
The Queensland Fuel Subsidy Scheme is backed by an audit and compliance program to ensure that the benefit of the subsidy is passed on. This audit activity occurs at the retail service station level as it is retail service stations that receive the subsidy payment. The decision to make the subsidy payment direct to retailers was made to limit opportunities for the subsidy to be eroded in the process of passing it down the petrol distribution chain.
The Queensland Government has no evidence to suggest that the reduction in the price differential is due to a failure on the part of retailers to pass on the subsidy. Nonetheless, I have already requested that the Office of State Revenue increase its compliance efforts.
However, I am also mindful that petrol retailers are largely captive to the pricing policies of the oil majors through the levels of pricing support they provide. Therefore, the reduction in the petrol price differentials in capital cities may not be a reflection of pricing decisions at the service station operator level.
Accordingly, given the national dimensions of this issue, and in the context of the Commission’s recent public statements on the current pricing practices of oil companies, I would appreciate your advice on reasons for the corresponding reduction in the differential between Brisbane and Sydney retail prices.
Of course, your advice may raise issues which the Queensland Government needs to pursue directly with the oil companies. On this point, I can assure you that the Queensland Government stands ready to play its part in trying to achieve fairer petrol prices for consumers.
Yours sincerely
Anna Bligh MP
Acting Premier and Minister for Trade,
Deputy Premier, Treasurer
and Minister for Infrastructure