AUSTRALIA | The ACCC has granted an urgent interim authorisation to the Australian Institute of Petroleum (AIP), its members, and other relevant industry participants to coordinate in managing impacts to Australia’s fuel supply chain stemming from the conflict in the Middle East.
The interim authorisation means the companies can discuss, exchange information about, and coordinate the supply of fuel across locations in Australia to alleviate shortages without risking a breach of competition laws.
Authorisation has neither been sought nor granted for fuel suppliers to share information about or reach an agreement on prices.
“We have urgently assessed and granted this interim authorisation, received late Wednesday, because we recognise the impact of the current situation on consumers, businesses, and farmers,” said ACCC Chair Gina Cass-Gottlieb.
“We recognise how critical it is that industry is able to quickly and efficiently coordinate and respond to the supply chain disruptions we are experiencing. However, allowing the major fuel companies to coordinate raises real risk of harm to competition. We are granting the urgent interim authorisation with conditions to mitigate this risk."
It is a condition of the authorisation that each applicant must take actions consistent with the direction or advice of the Commonwealth, states and territories regarding prioritising and facilitating the supply of Fuel Products to independent distributors and wholesalers.
In addition, the ACCC has imposed conditions on the authorisation that seek to maintain independent fuel distribution.
“We note that independent suppliers are part of their local, regional communities and have established relationships in their areas. They are a crucial part of supply chains in this market and need to be part of the solution to the fuel supply issues, including by receiving adequate allocations from the major suppliers."
The ACCC will shortly commence public consultation on the application for a final authorisation.
Fuel prices rise as international price volatility continues
On the 20th of March, the ACCC also published its second weekly petrol and diesel price monitoring update, which showed that petrol and diesel prices continued to rise in the past week, though less sharply than at the start of the current Middle East conflict. Consumers continued to experience shortages in some locations as demand increased.
The ACCC has increased its monitoring of the fuel industry from its usual quarterly reporting to weekly reporting.
In the previous week’s update, it was observed that average retail petrol prices in many cities increased as quickly as indicative wholesale prices.
Some fuel businesses have told the ACCC that, rather than setting retail prices based on the cost of fuel in their storage, they have moved to prices based on what it will cost them to restock at current prices, given the risk and volatility in international markets.
ACCC Commissioner Anna Brakey said that the latest analysis showed that while retail prices continued to rise, very sharply in some areas, the size of the increases has reduced during the past week.
“We know that households and businesses are feeling the impact of these disrupted and volatile market conditions. We urge fuel retailers to be honest and fair with their customers. Consumers can access information on our website, and we encourage them to use fuel apps to find retailers with lower prices and reward them for offering a better deal."
International crude oil and refined fuel prices continued to rise, particularly the benchmark price for refined diesel (Singapore Gasoil 10 ppm). The benchmark price is up 18 percent from the previous week, influenced by tighter diesel supply and reduced availability of suitable Middle Eastern crude oil.
The international benchmark price for refined petrol, Singapore Mogas 95, was around 127 Australian cents per litre (cpl) in the week to the 18th of March, up around 21 cpl from the previous week.
In the week to the 18th of March, weekly average Gasoil 10 ppm prices, in Australian cents per litre, were around 165 cpl, an increase of around 25 cpl from the previous week.
Capital city petrol and diesel price movements
Across the five largest cities, daily average retail petrol prices on the 18th of March were 234.1 cpl, an increase of 14.4 cpl from the previous week.
On the 18th of March, Perth had the highest daily average retail petrol prices among the eight cities (240.1 cpl) and Canberra had the lowest (232.0 cpl).
For diesel, retail prices across the five cities were 275.7 cpl on the 18th of March, an increase of 35.4 cpl from the previous week.
On the 18th of March, Melbourne had the highest daily average retail diesel prices among the eight cities (277.6 cpl), and Perth had the lowest (273.0 cpl).
Fuel prices in regional locations
The new weekly report also includes retail regular unleaded petrol and diesel prices in over 190 regional locations, giving a more comprehensive picture of fuel prices across Australia.
Most regional locations across Australia have also experienced sharp retail price increases. The size of increases in regional locations has varied, due likely to a range of factors, including local supply stability and unexpected demand.
The ACCC’s first report covering the period since the start of the conflict is available on the ACCC website. The next weekly fuel price monitoring report is due to be published on Friday.
The ACCC also met with executives from major fuel companies to set out its expectations and discuss the impact of price spikes and supply issues on consumers and businesses.
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