ACCC criticises NT government on Darwin petrol prices

The Australian Competition and Consumer Commission released a 60-page report on Monday, criticising the fuel supply management of the Northern Territory government.

The report has brought into light the huge gap of 10 cents per litre in Darwin petrol prices as compared to that of the major cities, including Sydney, Adelaide, Brisbane, Perth and Melbourne, in 2012-13 to 2013-14.

“Given that petrol retail site in Darwin were already significant, it seems that motorists were paying around 10 cpl more than they should have been in a competitive market,” ACCC Chairman Rod Sims said. “This had a significant impact on motorists in Darwin: the report indicates that the higher retail process added around $9 million per year to their petrol bill.”

The commission’s report also highlighted the ways in which transparency could be increased and local market competition could be encouraged. It targeted the fuel supply arrangements of the NT government that are exclusively available for Puma Energy, considered as local petrol market ace.

“The fact that the Northern Territory Government has a fuel arrangement with the largest player in the petrol market may be a contributing factor to the consolidation in the retail market,” the ACCC report stated. “When the current contract expires in 2017 the Northern Territory Government may wish to consider the implications on the fuel market of government fuel card arrangements.”

NT Chief Minister Adam Giles responded to the ACCC’s criticism and said that the government takes a decision based on its analysis and it would look into ACCC’s viewpoint to work on the matter. Giles mentioned that only three percent of the sold Darwin petrol reaches the government vehicles.

“One of the things we’ve developed ourselves is the fuel prices disclosure bill,” he added.

ACCC’s report on Darwin petrol prices is the first-ever regional study to be conducted via the new petrol monitoring arrangements. The arrangement was announced by the government in December 2014. The watchdog, therefore, is currently studying the market in Launceston and Armidale via this monitoring system to make sure it makes an accurate decision and provide viable report.

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