8 Feb 2017

Govt may have 'hard words' for oil companies

7:35 am on 8 February 2017

Oil companies will find out today what action the government is intending to take over high petrol prices.

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Photo: 123rf.com

Energy Minister Judith Collins is to speak with the big oil companies to discuss the government's options, saying there were "quite a few".

Ms Collins has already flagged a possible inquiry, and said people had a right to know why the price of petrol can vary greatly from region to region.

"My intention is to speak to all of the major oil companies... and just discuss the progress that we're making.

She said there may be some "hard words" exchanged, but she was "sure it would be very polite".

"There are some options... there are a whole range of them, but my preference is to discuss what we intend to do with the companies themselves before we announce it to the media."

Labour Party energy spokesperson Stuart Nash has called for a select committee inquiry to get to the bottom of whether the companies' profit margins have gone up significantly, and if so, to recommend a government response.

He said the oil companies should be sitting up and taking notice.

"This has been a big story because New Zealanders feel as if they're being ripped off. Whether that's true or not I don't know."

As well as an inquiry - which could be at ministerial or select committee level, or carried out by the Commerce Commission - the government could also legislate to require more separation between the refinery and retail businesses.

Mr Nash said it would be a "very, very bold minister" who took that course of action, without extensive industry consultation.

"Doing that without any sort of inquiry really is 'Big Brother', but what a select committee can do is if it finds that if there's no separation and that's stifling competition, then that may be a recommendation that comes out of this."

In the end, he said, the minister had very broad powers and "can do anything she wants".

"The government can change the law to say whatever it wants it to say".

Mr Nash said there would have to be a really good reason, before going down that track.

Ms Collins said she hoped to make an announcement later this week.