Australia’s competition regulator will urgently meet with fuel market participants to demand explanations for recent pricing behavior as petrol and diesel costs climb sharply during the ongoing Middle Eastern crisis.
The Australian Competition and Consumer Commission (ACCC) announced the move amid growing consumer concern over sudden increases in fuel prices and reports of distribution problems in regional and rural parts of the country. The regulator said it is seeking more detailed explanations from retailers about their conduct during the period of volatility, according to a statement.
The ACCC will also begin releasing weekly updates on the fuel market to improve transparency for consumers and increase oversight of retailers’ pricing practices, per a statement.
ACCC Commissioner Anna Brakey said the regulator is closely monitoring developments in the market as prices rise.
“We know the impact that higher prices are having on Australian consumers. We have been watching pricing behavior closely since the outbreak of recent hostilities in the Middle East and will take action against any case of misleading consumers about the reason for the steep and rapid increase in prices by individual retailers or any breaches of the competition provisions,” Ms. Brakey said.
According to a statement, the ACCC recently contacted petrol retailers requesting information about the price increases and expects responses by the end of the day. The emergency meeting with industry representatives will focus on explaining the reasons behind the recent price spikes and addressing public concerns.
“We are closely watching market behavior and if there is conduct that is collusive or misleading or deceptive, we will investigate it and take action where appropriate,” Ms. Brakey said.
At the upcoming meeting, the ACCC plans to reiterate its expectations to fuel companies and encourage them to publicly explain the drivers behind the recent surge in prices, according to a statement. Representatives from motoring organizations that advocate for consumers will also be invited to participate in the discussions.
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“We are now calling the industry into an emergency meeting to explain their actions during this period of volatility,” Ms. Brakey said.
In addition to pricing concerns, the regulator is investigating reports of diesel shortages in regional and rural areas. According to a statement, the ACCC is working with other government agencies to explore ways to support diesel distribution where supply issues are emerging.
“We are aware of concerning reports about diesel availability in regional and rural Australia. We know how critical diesel supply is to primary producers, transport businesses and many others, so we are prioritizing our work to assist with this,” Ms. Brakey said.
The regulator also noted that it has the ability to authorize certain forms of coordination among companies—such as agreements related to distribution—if such arrangements deliver a net public benefit, per a statement.
“The ACCC is able to authorize conduct, such as coordination or agreements relating to distribution, where it provides a net public benefit. We stand ready to receive an application for authorization,” Ms. Brakey said.
The commission warned fuel companies that it will take strong enforcement action if breaches of competition or consumer law are identified.
“The petrol industry should be under no illusions. We will act decisively and to the fullest extent of the law,” Ms. Brakey said.
The ACCC also expressed support for government plans to increase the maximum penalties for certain breaches of Australian Consumer Law and the Competition and Consumer Act by fuel companies. According to a statement, the proposed change would raise the cap from $50 million to $100 million, and the regulator indicated it would pursue the highest penalties available in any cases brought before the courts.
Source: ACCC
