6 Sep 2023

Commerce Commission issues 'please explain' to fuel companies on pricing anomolies

10:36 am on 6 September 2023
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The latest report shows motorists in Whangārei are paying more for fuel than other cities. Photo: 123rf

The Commerce Commission is asking big fuel companies to explain retail price anomalies, which it cannot understand using industry-supplied data.

The commission's latest Quarterly Fuel Monitoring Report for the period ended 31 March raised concerns about retail price variations between cities and towns - and within individual centres.

In a statement, commission chairperson John Small said some of the pricing levels and variations were concerning, with no clear underlying factors.

"We are seeing wide variations in prices both between and within cities, and these pricing differences do not appear to be explained by differences in the underlying costs," he said.

It was the first year of price monitoring as part of a new Fuel Industry Act regulatory regime, put in place in 2020, he said.

"We're writing to all the major fuel companies in New Zealand to ask them to please explain what we've seen in some of the pricing levels observed as part of our analysis feeding into Quarterly Fuel Monitoring Reports.

"In a competitive market, we'd expect to see prices at the pump reflect the cost of supplying fuel at the pump, whereas what we are seeing is retailers in some towns and cities charging a lot more for what is essentially the same product with similar cost components."

For example, the report showed motorists in Whangārei were paying more for fuel than the other cities studied, which Small said could not be easily explained by the data supplied to the commission.

"Marsden Point is our nearest port to major fuel sources like Singapore and South Korea, and being near the Marsden Point import terminal means higher prices can't simply be explained by higher ocean or local transport costs. Land costs in Whangārei don't shed any light on these prices either.

"In contrast, Hamilton is seeing some of the lowest prices in the country - another anomaly we're wanting these major fuel companies to shine a light on."

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