Today in the Australian Caltex Australia chief executive Julian Segal hit back at competition watchdog who accused them of price gouging. Claiming that it is in fact, red tape increasing petrol prices at individual service stations.
“You are talking about sites that have to handle hazardous substances and the level of regulation, rightly so, is significantly higher as time goes by,” Mr Segal said.
“Compliance with these kinds of regulations costs up to $1m of investment in each site, so when you look at the money we invest, in order to build, maintain and operate this network, you find out the competition is intense.”
He says the margins quoted by the ACCC do not take into account extra costs to meet regulation around things such as vapour control and electronic billboards.
ACCC chair Rod Sims said: “We remain concerned about the petroleum industry’s high gross retail margins, which indicate motorists are not reaping the full benefits of lower international crude oil and refined petrol prices”
The Australasian Convenience and Petroleum Marketers Association (ACAPMA) said the report is focussed on the gross retail margin, which is not the same gross retail profit.
“There are a number of factors that are pushing up costs for fuel retailers in Australia and it is surprising that these factors do not get any mention in this latest ACCC report,” ACAPMA CEO Mark McKenzie said.
ACPMA said a significant part of the increase is likely to be a direct response to the increasing cost of state and territory government regulation and a narrowing of profit margins from convenience store sales.
They say that new regulations on fuel retailers at a state and federal level are seeing costs flow through to motorists.
This wouldn’t be the first time that the Australian Competition & Consumer Commission has got it wrong. They have been accusing petrol companies of price gouging for decades without clear evidence.
Back in May, I wrote about how ACCC interference led to a situation of a nationalised broadband network that completely halted private sector investment in Australian broadband. Ironically leading to a situation where there is no longer any competition in wholesale broadband provision in Australia. Hardly competitive as its name suggests.
