The Australian Competition and Consumer Commission has commenced a formal investigation into price information sharing arrangements in the retail petrol industry.
The independent watchdog says it believes such arrangements may breach the Competition and Consumer Act and claims it has put the industry on notice for some time about its concerns.
The ACCC says the petrol price sharing arrangements allow for the private and very frequent exchange of comprehensive price information between the major petrol retailers.
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The watchdog is concerned this allows petrol retailers to quickly signal price movements, monitor competitors’ responses, and react to them.
“The ACCC has now commenced a formal investigation into this matter, and a dedicated investigation team has been assigned,” ACCC chairman Rod Sims said in a statement released yesterday.
“While the ACCC does not usually comment on its current investigations, the ACCC considered it appropriate to inform the public that it is undertaking this investigation given the significant public interest regarding petrol pricing,” Mr Sims said.
Australian law bans contracts, arrangements or understandings that cause or are designed to erode competition.
Ingrid Just, spokesperson for Choice, told SmartCompany the consumer group welcomed the ACC’s investigation.
“I think consumers scratch their heads around petrol pricing,” says Just.
“There are a number of issues: one, how do the cycles work; and, two, how do they put them up all at the same time and down all at the same time?
“Consumers are super price sensitive when it comes to petrol. It is certainly something that presses their buttons.
“Perhaps it is because they seem to fluctuate so readily and…we are at the stage when they are on the increase along with electricity prices and other.”
However, shadow treasurer Joe Hockey was dismissive about the likely outcome of the ACCC’s investigation.
“There has been an inquiry under all governments into petrol virtually every 12 to 18 months, so how this will be different I don’t know,” Hockey told the Seven Network.
“People are frustrated with the enormous volatility in prices.”