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FuelWatch on Ice

Fuel frenzy: FuelWatch was to have been in place by December 15.

Government admits its FuelWatch scheme won’t be in place for Christmas holidays

General News logo4 Nov 2008

not be in place before the Christmas school holidays as planned, even in the unlikely event it is approved by the Senate this month.

The federal opposition claims that recent high-profile discounting by some independent fuel retailers in Sydney, which attracted widespread media coverage for their 99-cent fuel offer that would be illegal under the FuelWatch system, has caused the government to go cold on the proposed legislation.

Coalition competition policy spokesman Luke Hartsuyker said the opposition was prepared to debate and vote on the FuelWatch bill in October, claiming it was the government's decision to defer the vote.

“When we see measures such as the very deep discounting that has occurred in Sydney recently with fuel being sold at 99 cents per litre, when we see that as being illegal under FuelWatch, it’s quite clear that the government would not want to force a vote on this legislation,” he said this week.

Assistant treasurer Chris Bowen said it was unlikely FuelWatch would be implemented before the government’s own December 15 deadline.

“But we will obviously have it in place as soon as we possibly can once it is passed by the Senate, if it is,” he said.

Under the FuelWatch legislation, fuel retailers would be required to publish their prices on a government website once a day, locking them in for the following 24 hours.

The federal government says it remains committed to FuelWatch, which it maintains will help motorists find the lowest petrol prices, but the Coalition and South Australian independent Senator Nick Xenophon believe it will reduce competition and disadvantage smaller independent fuel outlets.

The Coalition used its pre-July 1 Senate majority to refer the FuelWatch bill to the Senate Standing Committee on Economics, which in mid-October recommended the legislation be passed, but the scheme remains likely to be defeated because the government needs all balance-of-power Senators to pass legislation the Coalition opposes.

Meanwhile, the Victorian Automobile Chamber of Commerce (VACC) has called on the Australian Competition and Consumer Commission’s (ACCC) new petrol commissioner, Joe Dimasi, to abandon FuelWatch and to stop “pussy-footing around with oil companies”.

“We encourage Mr Dimasi to abandon the flawed national FuelWatch scheme - it is simply a circus - and focus instead on the limited competition and control of the market by the oil majors at the wholesale level,” said VACC executive director David Purchase.

The VACC call follows confirmation Mr Dimasi has written to all major petroleum suppliers to ask then to explain high petrol prices at the pump.

“Mr Dimasi does not need to write to the oil companies. He should already have all the evidence he needs at his finger-tips from previous investigations. What he really needs to be doing right now is taking the oil companies to task.

“Through the ACCC’s 2007 Petrol Price Inquiry and the efforts of the previous petrol commissioner, Mr Pat Walker, there has been enough letter-writing to date. Now is the time to stop the correspondence and to start the action.

“VACC requests that Mr Dimasi immediately look at the operation of the wholesale petrol market and the issue of Terminal Gate Prices. Independent service station owners are being denied a fair price there. This puts independents at an immediate pricing disadvantage and does not allow for a competitive market at the retail level.

“For too long the oil majors have enjoyed top-to-bottom control of the petrol industry and the ACCC admitted as such, referring to the ‘comfortable oligopoly’ in the 2007 Inquiry.

“Until someone comes out swinging, then the oil majors will continue to rule the roost and give the petrol commissioner the run-around,” said Mr Purchase.

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