A study into New Zealand’s retail fuel market confirms that it has features which may not be consistent with a workably competitive market, Energy and Resources Minister Judith Collins says.
The Study found that retail fuel margins have increased significantly over the last five years while fuel margins for aviation and commercial road users have been flat or falling. It also found that higher petrol prices in the South Island and Wellington are not explained by higher costs in those areas.
“There were difficulties in comparing the information received from the companies, and some very specific information that was required could not be obtained.
“As a result, the Study doesn’t definitively answer whether fuel prices are reasonable or not. However, the Report does conclude that “we cannot definitely say that fuel prices in New Zealand are reasonable, but we have reason to believe that they might not be.”
“This is a very complex area and the Study takes us a significant step forward in our understanding. I have now instructed my officials to assess the recommendations of the Study and report back to me by November.
“Furthermore, the Market Studies powers announced recently by the Minister of Commerce and Consumer Affairs will give the Government the option to direct the Commerce Commission to undertake a further competition-specific fuel market study, backed by the ability to require comparable data across companies. There is currently no legal mechanism to do this.”
“I would like to thank Z Energy, BP, Mobil and Gull for taking part in the Study.”
The Fuel Market Financial Performance Study, MBIE summary of the Study and the Cabinet paper are available here.