| 04.05,12. 05:58 AM |
ACCC investigators put petrol prices back under the microscope
May 4, 2012
THE competition authority will open a formal investigation of price-signalling among petrol stations, amid fears the practice could be ripping off motorists.
It is understood the Australian Competition and Consumer Commission will focus on the website Informed Sources, which allows petrol stations to share up-to-date information about their price changes.
With bowser prices near record highs, the ACCC said last night it was concerned petrol retailers were hurting competition by signalling their price intentions to rivals, waiting for a response, and reacting accordingly. It said such sharing could reduce competition - which would keep prices unnecessarily high.
Advertisement: Story continues below The tendency of petrol prices to move in lockstep has been a bugbear of consumer groups.
Despite previous reviews of fuel prices, competition experts have long argued the industry has a problem with price-signalling, whereby businesses communicate their pricing plans in a way that is uncompetitive. ''The ACCC has put the industry on notice for some time about its concerns in this area,'' said an ACCC commissioner, Joe Dimasi.
The investigation comes after a recent surge in oil prices pushed the average cost of petrol to 151.6¢ a litre last week, its highest level in 3½ years.
The federal government introduced a ban on price-signalling last year but this only applies to banks, and was designed to stop lenders communicating their plans on interest rates.
This decision came despite the previous ACCC chairman, Graeme Samuel, saying the problem affected other industries and the ban should apply more widely.
Mr Samuel last week said it was ''a bit unfortunate'' the government had chosen to focus on the banks, because the ACCC's inquiry into petrol prices in 2007 had found that price-signalling was ''all about petrol''.
''The ACCC believed back then that the law was deficient in relation to dealing with what were effectively collusive arrangements between competitors, otherwise known as cartels,'' he said on the website The Conversation.
A competition law expert at the University of NSW, Associate Professor Frank Zumbo, said the investigation was ''long overdue'', and was likely to focus on whether the industry's price-sharing worked to the advantage or disadvantage of motorists.
''The underlying concern has always been that the sharing of information has an impact on price over a period of time. The question is to quantify that price effect, and determine whether on balance it benefits motorists or not,'' Professor Zumbo said.
A spokesman for Informed Sources welcomed the investigation. ''We've been involved in investigations by the ACCC in the past and we've been nothing but helpful, and are more than happy to help them.''