Glenn Sterle (WA, Australian Labor Party) Share this | Hansard source

The incorporated speech read as follows—

I rise to speak in support of the National Fuelwatch (Empowering Consumers) Bill 2008. This Bill has flushed out the Opposition and exposed them for what they are really about and what they really stand for.

Here we have a bill that is simply about ensuring consumers get a fair deal in the market place. It’s about ensuring that the cards are not unfairly stacked against Australian motorists because of the way the retail market for petrol operates in this country.

In particular, this bill aims at redressing the significant imbalance of market power that, in recent years, has become heavily weighted to the benefit of the oil companies and the major retail petrol chains and to the detriment of Australian motorists.

If there was ever any doubt that the major oil companies have been having a feast on consumers you just have to look at the gigantic profits that the world’s major oil companies have been making in the last few years. It is estimated that the five major oil companies made a total profit world wide of $123 billion in 2007. This figure is predicted to increase significantly in 2008.

While the increasing cost of petrol has been really hurting Australian families, the oil companies have never had it so good.

This is not a time to be batting on the side of the transport industry. It’s a time to be standing shoulder to shoulder with Australian families and motorists.

But what do we get from the Opposition—nothing less than a full frontal attack on the right of consumers to have the best available information on retail petrol prices in their area - in other words to have access to a fair and transparent retail petrol market.

Any fair minded person would acknowledge that for too long the Australian market for petrol has been characterised by a lack of price transparency between sellers and consumers at the retail level.

This was a major finding of the Australian Competition and Consumer Commission (ACCC) 2007 inquiry into the price of unleaded petrol. As well, the ACCC found that current arrangements allow sellers to react more quickly than consumers to movements in retail fuel prices.

In other words the current arrangements have a significant anti competitive aspect that acts to the detriment of consumers.

It is important to note that, in this regard, as the Assistant Treasurer notes on 21 September 2008, the ACCC has commented that the current situation is “the closest thing to collusion in the petrol market that you can get while still being legal”.

This is not something that a Labor Government is willing to accept on behalf of the Australian community.

The objectives of this bill are to:

• empower consumers to make informed decisions and purchase fuel at the lowest possible price;
• increase reliability and certainty of fuel price information available to consumers;
• reduce consumer search costs;
• address consumer anxiety by eliminating intraday fuel price volatility;
• address the existing information imbalance between petrol retailers and consumers; and
• promote competition in the retail fuel market.

Motorists are fed up to the back teeth with being pawns of the fuel producers and the retail petrol chains and are demanding transparency in the retail petrol market. This Bill will provide this.

Motorists are sick of the games played by the individual major petrol retailers where, if they don’t live in WA, the price of petrol can fluctuate during the day at their local petrol station for no apparent good reason.

What we appear to have is a deliberate game of petrol price confusion orchestrated hour by hour, day by day, week by week, by the major petrol retailers.

This is not just a strategy for individual petrol sellers to increase revenue through increased market share, it is a pricing strategy that has a much broader aim, namely to confuse the punters and to substantially take the edge off effective price competition in the retail petrol market.

Before the introduction of WA’s Fuelwatch scheme, motorists in WA had to put up with intraday petrol price fluctuations at individual petrol outlets.

This is still the situation in the eastern states where the petrol prices you see on the way to work in the morning can be substantially different when you drive home in the afternoon with the intention to fill the tank at the cheapest price you saw in the morning. Fuel delivered at one price and sold at another while still in the tank? How does that work?

Who wins in this situation? It’s a sure bet it isn’t the motorist.

From recent work done by the ACCC it has become evident that the marketing of petrol in Australia by the oil companies and the retail petrol chains is under pinned by a highly sophisticated system of petrol retail price monitoring and marketing techniques.

We know, for example, that the major petrol retailer’s use a sophisticated retail petrol price monitoring service provided by a company called Informed Sources. The company is able to provide its Australian clients with petrol price information from more than 3500 retail petrol outlets every fifteen minutes across the major capital cities.

A service like this wouldn’t come cheap so it must be worth the money. How can it be claimed that this level of retail petrol price monitoring by the major petrol retailers benefits consumers while at the same time the major retailers infer that a national Fuelwatch scheme for consumers would somehow be bad for consumers?

WA has had a highly regarded and successful Fuelwatch scheme in place for 8 years.

The scheme protects WA motorists from being ambushed by petrol price changes, which in other states can occur at any petrol station at any time of the day or night. There is ample evidence that the WA scheme has consistently provided lower petrol prices compared with petrol prices in other state capitals.

Nonetheless we have this farcical situation where we have West Australian Liberal Party federal MPs and Senators openly panning the WA Fuelwatch scheme in direct opposition to the policy of the newly elected State Liberal Government. The new State Liberal Government has promised to retain the scheme which was an initiative of a State Liberal Government in 2001.

WA Liberal Senators and MPs are so far out of touch with reality it’s not funny. It’s a disgrace. They have shown no regard for the interests of the West Australian public in this matter. They are obviously more interested in serving the interests of the multi-national oil companies and the major petrol retail chains.

You can be sure I for one will be making sure that WA voters know what sort people they have representing them in the Australian Senate from the Liberal Party.

With the WA scheme WA motorists on any day are able to find out where the cheapest petrol is in their area. They know that the price won’t change during the day at the whim of the retailer.

In WA, the fuel prices for every petrol station are all available the night before on all TV channels. This promotes consumer choice and allows West Australians to know and choose the cheapest fuel.

In other words they do not have to play an hourly game of lottery with the oil companies and the petrol retailers on how much they are going to be slugged when they need to fill up their vehicle’s fuel tank.

It not insignificant that the Royal Automobile Club of Western Australia, which has been advising and supporting WA motorists since 1905, and which has more than 600,000 members, has given its strong support to the WA Fuelwatch scheme on the basis that it benefits consumers and helps to keep fuel prices competitive.

In a media statement on the 28th of May this year, Mr David Moir, the RACWA Executive Manager for Member Advocacy, had this to say;

“Fuelwatch has been in place in Western Australia for seven years, and RAC’s support is based on analysing its impact in that time”.

David Moir went on to say:

“The RAC completely supports WA’s Fuelwatch and the benefits it passes on to consumers.”

Six days later in the Other Place the WA Liberal Party Member for Stirling in a speech on this Bill had this to say about the WA Fuelwatch scheme, and I quote;

“I will leave aside the fact that those opposite keep quoting the RAC in Western Australia in support of it, even though the RAC in Western Australia is actually opposed to this scheme”

How’s that for gall on the part of the Liberal Party.

How can you trust anything the Liberal Party has to say on this matter when it is willing to blatantly verbal a non partisan, non profit organisation that has been fearlessly representing the interests of motorists in WA for over 100 years?

You have to ask yourself why the Liberal Party is lining up with the position and interests of the major oil companies and retail chains against the interest of consumers.

You would be forgiven for thinking that is something very suspicious about the direction that the Opposition is trying to take the debate on this bill.

Again there has been a lot said by the Opposition about the price of petrol in WA compared with other States that don’t have a consumer information scheme like WA’s Fuelwatch.

The peak motoring body in Australia, The Australian Automobile Association, publishes on its website monthly average petrol prices going back to 1998. These petrol price monitoring statistics are collected by FUELtrac, a well established and reputable independent organisation.

The petrol price monitoring data provided to the Australian Automobile Association by FUELtrac show that for the past five years up to June this year, the aggregate monthly average price per litre for unleaded petrol in Perth was below the aggregate monthly average price in Sydney, Melbourne, Adelaide, Canberra and also Brisbane when the Queensland government subsidy is factored into the Brisbane petrol price.

I ask again in the face of this independent petrol price monitoring data, why is the Liberal Party so opposed to the WA Fuelwatch scheme and to the introduction of a similar national scheme? Why are they lining up will the oil companies in this matter?

The Liberal Party deserted Australian working men and women with their disastrous industrial relations legislation and now as an encore they are turning their back on Australian consumers and Australian families that rely on their motor vehicle for essential transport every day of the year to get to work and to get their children to school as well as sport and recreation activities.

The Federal Liberal Party continues to demonstrate it has learnt nothing from the last Federal Election.

When the oil company’s poor cold water on providing motorists with transparent and easily accessible retail petrol price information you know for sure that, unlike the RAC of Western Australia, the oil companies aren’t concerned about the interests of individual motorists.

This is clearly illustrated by evidence given at the public hearings of the ACCC’s 2007 inquiry into the price of unleaded petrol. At the public hearing in Melbourne on 5th September 2007, Brett Davidson, the Retail Pricing Manager for BP Australia implied that BP didn’t like WA’s Fuelwatch 24 hour price regulation. BP thought it was a bad thing because it put BP in an uncertain position.

When pressed by counsel for the ACCC about this, the BP representative acknowledged that the 24 hour price regulation resulted in a little more guessing by BP and a little less guessing by the consumer.

Also the ACCC found that the refinery-marketers considered the WA Fuelwatch scheme as problematic because it prevented intra-day price movements.

It’s apparent that companies selling petrol into the retail market would much prefer open slather with the retail price on an hourly basis if they can.

Hence from the evidence collected by the ACCC Petrol Price Inquiry, it is difficult not to come to the conclusion that competition has two different meanings when it comes petrol retailing.

For the refiner-marketers it is all about maximising profit in the market by skilful manipulation of retail petrol prices on, if necessary, an hourly basis and on an outlet by outlet basis, in order to nullify competitive forces in the market and to put the consumer on the back foot as far finding the cheapest petrol price.

For the consumer, the expectation is that competition means he or she will be paying the fairest price that a truly competitive market can deliver. It is quite amazing that the Federal Liberal Party refuses to recognise these simple facts and is not willing to stand up for consumers.

The stance by the major oil companies and the national petrol retailers, which apparently has the backing of the Federal Liberal Party, needs to be exposed for what it is, an unqualified case of commercial, if not ethical, double standards.

What right do the suppliers and retailers of petrol have to deny consumers the same level of access to retail price information that petrol suppliers and retailers themselves already have.

This bill is about assisting Australian families and motorists to get a fair go in regard to the petrol retail market—nothing more nothing less. It deserves the support of all Senators.

I strongly commend the bill to the Senate.