The retail fuel market will be the first Commerce Commission market study, Prime Minister Jacinda Ardern and Commerce and Consumer Affairs Minister Kris Faafoi announced today.
“This Government is committed to easing financial pressure on families. I had previously voiced my concern about the high cost of fuel, because it is a core expense for consumers and businesses,” Ms Ardern said.
“New Zealanders deserve peace of mind that the price they are paying at the pump is fair. At the moment, we cannot definitively say whether that is in fact the case across New Zealand so this is a market that most certainly warrants a full investigation,” she added.
Mr Faafoi said that while there were several possible markets mooted for consideration, the retail fuel market clearly met the test for investigations.
“Simply, it is in the public interest to ensure people and business are not paying too much for fuel. There are existing indications of competition problems in the retail fuel market that are of concern to me, such as the more than doubling of petrol and diesel importer margins over the past decade,” he said.
“It is also a market that is hugely important to consumers and to our economy, given the extent to which we rely on fuel and the size of the market, with around six billion litres of petrol and diesel consumed for land transport use annually,” he added.
Mr Faafoi said that the Commerce Commission will be undertaking a full and thorough analysis into competition in the retail fuel market.
“This will enable us to better understand the market conditions and determine whether consumers’ interests are being protected at present, and if not, what action needs to be taken,” he said.
The terms of reference for the study into retail fuel markets are expected be published in the Gazette on Wednesday, December 5, 2018, when the Commission will start the study.
The Commission will provide further information about the process and updates and will be required to publish a final report by December 5, 2019.
Image Courtesy: RNZ