COMMISSIONER TO INVESTIGATE FUEL PRICES
Published Tuesday, 21 August, 2007 at 03:00 PM
JOINT STATEMENT
Premier and Minister for Trade
The Honourable Peter Beattie
Deputy Premier, Treasurer and Minister for Infrastructure
The Honourable Anna Bligh
The State Government has established a Commission of Inquiry to determine why up to $125 million of the $541 million a year fuel subsidy is not ending up in the pockets of Queensland motorists.
Premier Peter Beattie told Parliament this morning that former Queensland Court of Appeal judge and former Federal Court judge Bill Pincus QC will head the inquiry, which will report back by November.
“An intensive six-month, state-wide Treasury task force investigation found retailers were not to blame for motorists missing out on the full benefit of the 8.354c a litre subsidy,” Mr Beattie said.
“Concerns were raised with me and the Deputy Premier about Queensland fuel prices earlier this year, particularly in terms of the differential between Brisbane, Sydney and Melbourne over the December 2006 -January 2007 period.
“The difference in fuel prices between Queensland and the other states in the six months to June has been considerably less than the subsidy – with the price gap only 6.1c between Brisbane and Sydney and 5.5c compared to Melbourne.
“The task force audit has found prima facie evidenc3e of substantial market power that could be consistent with wholesalers absorbing a share of the subsidy.
“The Deputy Premier established a Fuel Task Force to investigate these discrepancies and as a result of its findings, this Inquiry has been established to determine why Queensland motorists appear to be missing out on the full subsidy and whether it can be passed on in a better way,” he said.
Deputy Premier and Treasurer Anna Bligh said the task force had found competition in the market had dropped. From 2002 until June this year, the number of retailers had fallen by 20 per cent and the number of sites by 12 per cent, while 17 per cent more petrol was being sold.
“The smaller groups, those with less than 10 sites, are selling less fuel while those with more sites increased sales by more than 40 per cent. There are fewer players in a larger market,” Ms Bligh said.
“I can understand the state’s fuel industry has changed by I cannot accept that means motorists should miss out.”
Ms Bligh said that during the task force’s six-month review period, retail margins on unleaded petrol sold in Brisbane were on average 3c and 2.33c per litre higher than in Sydney and Melbourne respectively.
She highlighted price variations unearthed in Treasury's Task Force.
"If you are an Oxley mum dropping the kids at school, a grazier at Nebo or a Cairns cabbie you are entitled to know that you are getting all of the Queensland Government’s 8.354 cents a litre subsidy.
"Regional motorists also need to be reassured that they are not missing out."
She said that the Task Force report showed variations that must be further examined.
"This Inquiry is about ensuring fairness for all - be it Brisbane or the bush," she said.
"Atherton is nearly 100km from the fuel port of Cairns – but for the six months to June 30 2007 its fuel price averaged 0.74 cents a litre cheaper than Cairns.
"Gympie is 163 km north of its source fuel port of Brisbane - but its fuel on average was 0.45 cents a litre cheaper than Brisbane.
"I have no issue with Gympie being cheaper than Brisbane, but Queenslanders are entitled to know why there are such variations.
"In contrast to this - Bowen is the 190km north of the fuel port of Mackay - but its fuel – for the six months average to July 2007 - was 5.04 cents a litre dearer than Mackay; whereas Longreach - which has to travel 777 km from its fuel port of Gladstone – it is on average 5.333 cents a litre dearer than Gladstone.
“However Emerald, which is 370km from its port of Gladstone, averaged 1.58 cents a litre dearer for the six-month period,” she said.
ENDS
Tuesday, 21 August 2007
Media contact: 3224 4500 (Premier’s office) or 3224 4379 (Deputy Premier’s office)
Premier Peter Beattie told Parliament this morning that former Queensland Court of Appeal judge and former Federal Court judge Bill Pincus QC will head the inquiry, which will report back by November.
“An intensive six-month, state-wide Treasury task force investigation found retailers were not to blame for motorists missing out on the full benefit of the 8.354c a litre subsidy,” Mr Beattie said.
“Concerns were raised with me and the Deputy Premier about Queensland fuel prices earlier this year, particularly in terms of the differential between Brisbane, Sydney and Melbourne over the December 2006 -January 2007 period.
“The difference in fuel prices between Queensland and the other states in the six months to June has been considerably less than the subsidy – with the price gap only 6.1c between Brisbane and Sydney and 5.5c compared to Melbourne.
“The task force audit has found prima facie evidenc3e of substantial market power that could be consistent with wholesalers absorbing a share of the subsidy.
“The Deputy Premier established a Fuel Task Force to investigate these discrepancies and as a result of its findings, this Inquiry has been established to determine why Queensland motorists appear to be missing out on the full subsidy and whether it can be passed on in a better way,” he said.
Deputy Premier and Treasurer Anna Bligh said the task force had found competition in the market had dropped. From 2002 until June this year, the number of retailers had fallen by 20 per cent and the number of sites by 12 per cent, while 17 per cent more petrol was being sold.
“The smaller groups, those with less than 10 sites, are selling less fuel while those with more sites increased sales by more than 40 per cent. There are fewer players in a larger market,” Ms Bligh said.
“I can understand the state’s fuel industry has changed by I cannot accept that means motorists should miss out.”
Ms Bligh said that during the task force’s six-month review period, retail margins on unleaded petrol sold in Brisbane were on average 3c and 2.33c per litre higher than in Sydney and Melbourne respectively.
She highlighted price variations unearthed in Treasury's Task Force.
"If you are an Oxley mum dropping the kids at school, a grazier at Nebo or a Cairns cabbie you are entitled to know that you are getting all of the Queensland Government’s 8.354 cents a litre subsidy.
"Regional motorists also need to be reassured that they are not missing out."
She said that the Task Force report showed variations that must be further examined.
"This Inquiry is about ensuring fairness for all - be it Brisbane or the bush," she said.
"Atherton is nearly 100km from the fuel port of Cairns – but for the six months to June 30 2007 its fuel price averaged 0.74 cents a litre cheaper than Cairns.
"Gympie is 163 km north of its source fuel port of Brisbane - but its fuel on average was 0.45 cents a litre cheaper than Brisbane.
"I have no issue with Gympie being cheaper than Brisbane, but Queenslanders are entitled to know why there are such variations.
"In contrast to this - Bowen is the 190km north of the fuel port of Mackay - but its fuel – for the six months average to July 2007 - was 5.04 cents a litre dearer than Mackay; whereas Longreach - which has to travel 777 km from its fuel port of Gladstone – it is on average 5.333 cents a litre dearer than Gladstone.
“However Emerald, which is 370km from its port of Gladstone, averaged 1.58 cents a litre dearer for the six-month period,” she said.
ENDS
Tuesday, 21 August 2007
Media contact: 3224 4500 (Premier’s office) or 3224 4379 (Deputy Premier’s office)