Ruapehu Mayor Weston Kirton: there is much dissatisfaction with fuel prices in the district.
Residents of Ruapehu have long felt discriminated against when it comes to the pricing of retail fuel and it’s high time the Commerce Commission investigated whether genuine competition exists in the district.
That’s the message from Ruapehu Mayor Weston Kirton, who has challenged the commission to carry out a comprehensive study into any factors that may affect competition for the supply of retail petrol and diesel used for land transport throughout the Ruapehu district.
Weston said the study should consider, but not be restricted to:
- Comparisons of pricing with other similar rural districts;
- Any factors that may hinder competition between individual retail outlets;
- The conditions for entry by potential competitors including independent suppliers and/or the conditions of expansion.
“I consider it would be in the public’s best interest to require a [Commerce Commission] study into retail fuel pricing given such things as inconsistency of pricing between retail outlets outside individual townships within the Ruapehu district,” Weston said
He points out that Ruapehu is located in the central North Island with good road access and is relatively close to main ports.
In view of this, the substantially higher fuel pricing towns such as Taumarunui have endured does not make sense.
“There is reason to suggest that retail outlet operators work together with pricing, avoiding true competition,” he said.
“It is the view of many fuel outlet customers in the township of Taumarunui, that they are exposed to high retail fuel prices compared to, for example, Te Awamutu (1.5 hrs north of Taumarunui), where the retail price was, on at least one occasion this month, 46c per litre (91 fuel) cheaper, and has consistently been at least 40-42c/L cheaper in recent times,” Weston said.
Following inquiries from the King Country News, Commerce Commission senior communications adviser Holly Cushen clarified that the Fuel Industry Act did not allow it to set fuel prices.
However, Holly said: “Under the fuel [pricing] regime, fuel wholesalers and distributers must provide information that helps the commission monitor and report on the competitive performance of the fuel market, including whether we see signs of competition improving over time.”
She said the current fuel regime had been developed to promote competition, particularly in wholesale markets, and this was intended to ultimately benefit New Zealand motorists.
“We are in the early stages of our fuel monitoring, having published the first two quarterly reports so far and a third due shortly, with a primary focus on understanding the market dynamics in the five largest cities in New Zealand.
The commission’s website said its two main roles under the Fuel Industry Act were:
n Enforcing the requirements of the Act and companies could face penalties of up to $5 million if they did not comply.
n Analysing information disclosed under the Act in order to monitor the competitive performance of fuel markets. The commission could also publish its analysis.
The commission could look into concerns a fuel retailer has misled or deceived you, or look into concerns two or more fuel businesses were co-ordinating on the prices they charged for fuel.
