Carol Brown (Tasmania, Australian Labor Party) Share this | Hansard source

The incorporated speech read as follows—

I rise today to make my contribution on the National Fuelwatch (Empowering Consumers) Bill 2008 and the National Fuelwatch (Empowering Consumers) (Consequential Amendments) Bill 2008.

The Minister for Competition and Consumer Affairs, Mr Bowen, during his second reading contribution aptly described this bill as one aimed at assisting motorists “… in buying the cheapest petrol, at the cheapest petrol stations, at the cheapest times.”

Indeed, the primary aim of the National Fuelwatch scheme is to empower consumers, by providing them with the necessary tools to make an active choice when it comes to filling up their tank.

The Scheme is also designed to bring an end to the wild intraday fluctuations in prices that currently occur and provide intraday pricing stability.

In light of unpredictable world oil prices and the global economic crisis, the power of stability and choice take on an even more valued meaning.

And as most of you would be aware the Economics Committee recently handed down its final report on the bills.

The final report supported the findings of the interim report handed down earlier this year in recommending that the Senate support the passage of the National Fuelwatch Scheme.

The Committee noted that a National Fuel Watch scheme if passed would “empower’ consumers and give them “…access to useful information about today’s and tomorrow’s prices —not just yesterdays.”

We have all seen over the last five years, oil prices soar and a significant increase in the cost of petrol. That is why it is so important to do everything reasonable in our power to assist motorists get the best price at the bowser.

As petrol prices have increased so has the strain on the weekly family budget. Consumers are now faced with the reality of each time they make their way to the bowser having to fork out $70 and over sometimes to fill the family vehicle with fuel.

The Rudd Labor Government understands that the rising costs of living are having a damaging effect on many Australians weekly budget.

That is why the Government, on the 15 March, in response the ACCC’s report, proposed this initiative and why we are here today to debate the National Fuelwatch (Empowering Consumers) Bill 2008.

And as the title of the bill attests, the National Fuelwatch scheme will do exactly that—it will empower consumers to make informed decisions.

Motorists will be given the information required to empower themselves to make smart decisions to shop at the petrol station which is offering the cheapest priced fuel.

For too long Australian consumers have been forced to sit back and be the victims at the mercy of the big petrol retailers.

The Government’s proposed National Fuelwatch scheme aims to bring this to an end by promoting greater transparency and addressing the imbalance that currently exists between consumers and big oil companies.

The scheme will empower consumers to seek out the best priced fuel in their local area, and motorists will be able to base their decision on real time information.

The National Fuelwatch scheme will arm consumers with the necessary price information to help them make smart decisions about where to purchase their petrol from.

Evidence submitted by the ACCC during the course of the Senate Economics Committee inquiry into these bills, also suggested that the introduction of Fuelwatch may also encourage a greater degree of healthy competition between retailers as buyers become better armed to shop around for the cheapest price.

The National Roads and Motor Association in their submission to the inquiry supported the ACCC’s comments, stating that “ by having to quote fixed fuel prices for a 24 hour period petrol retailers will have to make better judged and more competitive choices on fuel price?

This information available to consumers under a National Fuelwatch scheme has the potential to provide substantial savings, motorists will be in a position where they are able to knowingly access the cheapest petrol in their local area.

The Government believes that an initiative that provides some real savings to people, especially in the current global economic climate, can only be a positive thing.

These Bills will introduce a number of key requirements that would occur under a National Fuelwatch scheme.

Specified petrol retailers would be required to notify the Australian Competition and Consumer Commission (ACCC) of their next day’s fuel prices by 2:00 pm each day

Petrol retailers must then sell at their notified prices from 6:00 am the next day and maintain these notified prices for a 24 hour period.

Failure to notify or maintain the notified prices by petrol retailers is a civil penalty.

The ACCC will be responsible for implementing and administering the National Fuelwatch scheme, as well as investigating and bringing civil proceedings against those who breach the bill.

The Senate Economics Committee recommended that the data collected by Fuelwatch be made available by the ACCC to independent researchers to allow open analysis of the scheme.

The Committee also recommended that there be a designated review of the scheme after 12 months to monitor effectiveness and any impact on independent retailers.

This bill is a necessary step to help bring transparency back into the retail petrol market, the practical reality to date has been that the average motorist has little or no means of comparing the price of fuel at the various outlets in their local area- short of driving around each and every one!

We all would be aware of the impracticalities associated with the exercise of actually driving yourself around to each and every petrol station in your local area.

Not to mention the significant costs involved with undertaking such an activity, which would significantly outweigh any financial benefit the consumer may experience from finding the cheapest petrol in their local area.

The Governments National Fuelwatch scheme is based on the successful model currently operating in Western Australia.

The scheme will allow for fuel monitoring to take place via the Fuelwatch website, text messaging or an email message giving motorists information of the cheapest petrol in a particular area with a minimal amount of fuss.

Currently the lack of a means of comparison has meant that the majority of Australian motorists have, up until this point, been at the mercy of petrol retailers.

In fact up until this point, apart from motorists living in Western Australia, and those with access to ad hoc WA style fuel motoring systems, Australian motorists have had no practical means of comparison when it comes to fuel prices and little or no choice about how much they pay at the bowser.

The Federal Government’s proposed Fuelwatch Scheme aims to bring this blind uncertainty to an end.

If passed the Fuelwatch scheme will equip Motorists with the reliable price information they need to make decisions when it comes to how much they pay at the bowser - something all in this place should support.

The proposed Fuelwatch scheme is a direct result of a report received by the Government in December 2007 from the Australian Competition and Consumer Commission - the Petrol Prices and Australian Consumers: Report of the ACCC inquiry into the price of unleaded petrol.

The report made a series of recommendations relating to the Australian refining/importing, wholesale and distribution petrol markets and the Trade Practices Act 1974.

It also importantly recommended that the current imbalance of information between buyers and sellers in the fuel market should be addressed. Specifically it found that this imbalance between retailers and consumes occurs at a retail level.

The report also found that the capability of consumers to take advantage of the lowest and most competitively priced fuel in their local area is currently limited by fluctuations in the price of petrol; with the movement in price sometimes taking place three to four times a day.

Meaning the amount of effort and search costs consumers are likely to incur significantly inhibits them from taking advantage of the lowest petrol prices available in their local area.

However the Governments National Fuelwatch scheme will remove those barriers by providing this information to consumers via a simple click of the mouse.

As outlined in the Explanatory Memorandum by the Assistant Treasurer Mr Chris Bowen the introduction of a National Fuelwatch scheme, if supported by those opposite, will provide the following benefits to Australian consumers;

It will empower consumers to make informed decisions and purchase fuel at the lowest possible price.

It will increase reliability and certainty of fuel price information available to consumers.

It will reduce consumer search costs.

It will address consumer anxiety by eliminating intraday fuel price volatility.

It will address the existing information imbalance between petrol retailers and consumers.

It will promote competition in the retail fuel market.

The benefits to consumers from the Government’s proposed Fuelwatch are evident, by introducing a scheme which requires petrol retailers to lock in a fixed price for the sale of petrol over a 24 hour period consumers will receive the benefits.

Information will be available which details to consumers the location of the petrol station in their local area which has the cheapest fuel for the 24 hour period.

Such a scheme will see the elimination of consumers having to needlessly drive around their local area searching for the petrol station which offers the cheapest priced fuel.

This information will now be presented to motorists in a range of ways, either via a website, text message or email.

Fuelwatch will also help to create healthy competition between local petrol retailers, if one station is aware of a rival station down the street offering fuel at a cheaper price, then they are far more likely to reduce the price of their petrol in an effort to attract more customers.

A National Fuelwatch scheme will also solve the problem of intra day price movements in some instances petrol stations vary their price quite considerably during the day

The National Fuelwatch scheme will alleviate this intraday price movement, consumers can be safe with the knowledge that the price they see advertised at the petrol station in the morning is the price that they will be able to access at night on their way home from work.

The Governments proposed Fuelwatch scheme will not allow for these intra daily price fluctuations to occur anymore.

As I mentioned earlier there is already a working example of a successful fuel price monitoring service operating in Western Australia, making it a perfect example of how a National Fuelwatch would operate.

The Western Australian Fuelwatch scheme was introduced in January 2001 in response to a parliamentary select committee report.

The WA model monitors the price of petrol, diesel and LPG within metropolitan Perth and 52 other regional areas covering around 80 per cent of retail outlets across the state.

Each day by 2pm petrol retailers are required to provide the petrol, diesel and LPG prices which they will place in operation from 6am the next day for a period of 24 hours.

These fuel prices are readily available for consumers to access via logging onto the Fuelwatch website, they are reported on the evening television news and they are also published each day in the main morning newspaper.

Many people are also taking up the option to receive text messages or emails detailing the cheapest petrol prices in their local area.

A survey conducted by the WA Department of Consumer and Employment Protection has shown that over 90 per cent of WA motorists are aware of the states Fuelwatch scheme.

The study has also found that presently 300,000 people are accessing the Fuelwatch website per month. Over 32,000 people are receiving daily emails outlining the cheapest fuel in their region, and 60 per cent of people indicated that they actually use Fuelwatch.

These figures demonstrate how popular and widespread the use of Fuelwatch is in WA, it has provided consumers with real information so that they can make informed choices about where to buy their fuel from.

The Fuelwatch scheme has also received considerable support including from Choice’s CEO Peter Kell, who in a letter to Minister Bowen in January stated that

And I quote “Choice… would strongly support the introduction of a national scheme based on the WA Fuelwatch model by the Government”

Indeed, Tasmania’s peak motoring body, the RACT also reiterated the strong need for a petrol monitoring system in Tasmania, while giving evidence as part of the Senate Economics Committee’s formal inquiry into Fuelwatch Scheme.

The RACT General Manager told the inquiry that it “… supported the Western Australian style Fuelwatch…” and its support was based on “… the need to provide reliable price information… to Tasmanian motorists.”

The final report by the Senate Economics committee released on the 14 October into the proposed National Fuelwatch scheme, outlined many positive recommendations as to the value Australian motorists would gain from the introduction of a National Fuelwatch scheme.

The report found that and I quote

“Consumers using Fuelwatch will save themselves time and money by knowing which petrol stations have the lowest prices. Even consumers that do not use the scheme can indirectly benefit, as having better informed consumers seeking out good prices will reward retailers who lower prices for all customers’”.

The report also found that retail prices of petrol in Perth have fallen in comparison to prices of eastern capital cities. No alternative factor was found as an explanation for the drop in the price of fuel in Perth.

The Economic committee report into the National Fuelwatch (Empowering Consumers) Bill 2008 recommends that the Senate fully support the introduction of a National Fuelwatch scheme.

As has just been highlighted, the Senate Economics committee report into the National Fuelwatch Bill 2008 has many benefits for the adoption of such a scheme.

The scheme will help provide far greater transparency and competition in the petrol market. Real competition between petrol retailers can only be a good thing for many Australian consumers currently suffering under the weight of the global economic crisis.

No longer will motorists be left driving around scratching their heads searching for a station offering the cheapest petrol. Because Fuelwatch will lock in fuel prices for 24 hours ensuring that intraday price fluctuations can not occur.

It is worth noting that on any given day there is roughly a 15 to 20 cent difference between the cheapest and most expensive petrol available to motorists in Australian capital cities.

A difference of 20 cents per litre when filling up a 60 litre tank of petrol equates to a saving of $12, over time this becomes a significant amount of money, the Government’s petrol monitoring scheme will help consumers make these savings.

Because Fuelwatch will provide easy to access information so consumers can make the best possible decisions about where to purchase the cheapest petrol from.

I therefore call on all senators to support the Government’s National Fuelwatch scheme.