Wednesday, June 26, 2024

Act fuels new petrol pricing rules

New rules taking effect today will make fuel pricing more transparent for motorists, and enable the Commerce Commission to monitor and report on the competitive performance of fuel markets, the Commission said today.

Under the Fuel Industry Act 2020, petrol stations will be required to display the standard prices of all engine fuels they sell, and fuel wholesalers and distributors will be required to disclose a range of information to the Commission, including costs, prices, and sales volumes.  

Commerce Commission Chair, Anna Rawlings said the Act was introduced by the Government following a Commission market study in 2019. The Commission study found a number of shortcomings in the competitiveness of fuel markets. 

“One of our findings at the retail level was that many stations didn’t display the prices of premium fuel, which made it harder for motorists to shop around and understand the prices that different fuel retailers were offering,” she said. 

“The new rules are designed to provide better visibility of all prices for motorists. They will also level the playing field for retailers and improve competition for customers looking for a better deal at the pump.”

Ms Rawlings said that the first phase of rules under the Act came into effect in August last year and were designed to promote competition at the wholesale level to make it easier for retailers to access fuel at competitive wholesale prices. 

“Our powers to regulate the fuel market are taking effect in stages. The full impact of the changes won’t yet be felt at the retail level, but over time we expect they should have a positive impact on competition at wholesale and retail levels of the fuel supply chain,” she said.

The information that fuel wholesalers and distributors must provide will help the Commission monitor and report on the competitive performance of the fuel market, including whether we are seeing signs of competition improving. 

“Like most businesses in New Zealand, fuel retailers set the price of the fuel they sell to consumers. The Fuel Industry Act does not control fuel prices,” Ms Rawlings said. 

“However, the new regime is designed to promote competition, particularly in wholesale fuel markets, and this is intended to ultimately benefit fuel consumers.”

Further requirements under the Act will come into force later this year. Obligations on wholesale suppliers to be transparent in their contract terms and pricing methods already apply to new contracts and, from 11 August 2022, will also apply to all existing contracts.

These requirements are intended to provide more opportunities for fuel retailers to shop around for better wholesale prices.  

More information about the Fuel Industry Act and the Commerce Commission’s role can be found at www.comcom.govt.nz/fuel.

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