27 Nov 2017

Fuel storage facility raises prospect of more competition

12:17 pm on 27 November 2017

A new large fuel storage facility in Timaru that could potentially help drive fuel price competition has been granted resource consent this month.

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The site of the proposed fuel storage facility at the Port of Timaru Photo: Supplied

Timaru Oil Services has been quietly steering a planning application for a storage facility capable of holding more than 40 million litres of petrol and diesel at the Port of Timaru.

The development comes as an updated government report is due this week on the state of competition in the fuel retailing market.

Timaru Oil Services is owned by Pacific Petroleum, which is controlled by a well-known Tahitian businessman Albert Moux, who has bought businesses in the region from BP and Shell.

Pacific Petroleum now sells fuel through the region including Tahiti, Vanuatu, New Caledonia, the Cook Islands and Fiji.

No detail or comment from the company was available on its plans for the Timaru facility.

Permission for the facility has been granted by the local district council, but further consents are needed from Environment Canterbury.

Gull said it was aware of the Timaru tanks, and while it has had no contact with the developers, it was the type of facility that might interest Gull.

Fuel prices tend to be lower in regions where Gull, which typically charges less for fuel, competes with the major players.

The report due this week follows a study by the Ministry of Business, Innovation and Employment, which was delivered to the former government in July, which concluded fuel prices may not be reasonable, and that prices had risen far more in regions where competition was less.

Former energy minister Judith Collins accused fuel companies at the time of being cynical in the timing of price changes and said it was clear consumers were paying too much.

She raised the prospect of allowing the Commerce Commission to undertake competition studies into the sector and the new minister Megan Woods has picked up on that.

Z Energy chief executive Mike Bennetts said there was merit in the suggestion.

"If things were to go to the Commerce Commission, obviously there would be a thorough review, data would have to be provided by all market participants and there would be sufficient time and professional knowledge to be applied to the matter at hand," he said.

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