ACCC Takes Petrol Giants To Court Over Price Sharing

Consumer regulator the Australian Competition and Consumer Commission (ACCC) is sometimes criticised for not doing more to ensure petrol pricing is fair and competitive. That situation appears to have reversed dramatically today, with the ACCC taking Woolworths, Coles, 7-Eleven, BP and Caltex to court over allegations of "price sharing" that has reduced competition in the petrol market.

Petrol picture from Shutterstock

The ACCC began investigating potential collusion between large petrol retailers back in May 2012. Its submission to the Federal Court doesn't allege direct price sharing. Instead, it suggests that by all subscribing to a service called Informed Sources which tracked petrol pricing, retailers could still communicate with each other about prices.

"The ACCC alleges that fuel retailers can use, and have used, the Informed Sources service as a near real time communication device in relation to petrol pricing," chairman Rod Sims said. "In particular, it is alleged that retailers can propose a price increase to their competitors and monitor the response to it. If, for example, the response is not sufficient, they can quickly withdraw the proposal and may punish competitors that have not accepted the proposed increased price."

As we've noted before, much of the price of petrol is due to global oil prices and state taxes, and those factors aren't in question here. But even colluding on the estimated 12 per cent of costs that are due to local costs and margins can make a big difference. One interesting stat from the ACCC's backgrounder: even a 1 cent increase in fuel prices adds up to $190 million collectively for Australians over a year.

We'd expect this will be a complex and hard-fought case, and it won't kick off until 26 September. In the meantime we can expect petrol to become more expensive. But it's definitely one to keep an eye on.

ACCC


Comments

    This is arrant nonsense. All Informed Sources is doing is providing near-perfect information to a market. I'd argue it provides just as much information supporting price reductions as it does price increases. I was an area manager working for a fuel company 25 years ago and even back in those days a service station operator made it his life's work to always know what his local competitor's prices were.

    If you accept the logic of the ACCC then we should ban the internet and online shopping, and in particular price comparison sites.

      Phil, things have changed just a little in the past 25 years. God spoke to me and told me the $xxx,XXX figure sum each company pays Informed Sources for providing this service, the service of a middle man. Allowing the fuel retailers access to each others price, per site, per grade and the price data being x mins old. They must provide their own prices in order to receive the others.

      Although in WA this doesn't apply due to state law. THE LAST THING WE WANT WOULD BE TO FOLLOW WHAT WA HAVE DONE!

      God has now silenced me due to unmentionable reasons.

      :)

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