Petrol price inquiry 'a cynical exercise'

Last updated 02:36 16/06/2008

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The Government's inquiry into petrol pricing is a cynical move that would not make a difference to prices, National Party energy spokesman Gerry Brownlee says.

Commerce Minister Lianne Dalziel said yesterday that oil companies would have their pricing structures scrutinised by a government-ordered inquiry.

A similar inquiry in Australia ended with decision for the daily price of petrol to be set and notified by petrol companies the evening before.

Ms Dalziel hinted the Government was considering following suit.

While it had at best only made a marginal difference to the price of petrol, it had created "transparency" about the system, she said.

Mr Brownlee said petrol prices were dependent on the barrel price and the value of the New Zealand dollar.

A bureaucratic exercise would do nothing to bring pump prices down, he said.

Ms Dalziel had discussions with Australian industry experts over weekend, learning more about a scheme in Perth called Fuelwatch, where companies must post on a website the prices they will charge the next day.

The inquiry by consultants in New Zealand comes after fuel prices reached record highs, sending the price of petrol to more than $2.10 a litre.

It is expected to take six weeks to complete.

Ms Dalziel said in press release that the Economic Development Ministry had engaged independent consultants Hale and Twomey to review and analyse petrol pricing.

"The study will build on work already carried out as part of the Australian Competition and Consumer Commission report on the price of unleaded petrol, and consider implications for the New Zealand market," Ms Dalziel said.

"Where appropriate it will undertake similar analysis to that of the ACCC, using the relevant New Zealand data. It will focus on commercial aspects and areas requiring further assessment will be highlighted."

The work would also build on previous studies on the New Zealand industry and make recommendations as to any areas which may require further investigation.

It is anticipated the report will be complete by the end of July.

"I announced last month that while the Australian report shows the reality is that petrol prices are set according to the international market place, regulators can always work to ensure issues at the domestic level, such as the competitive dynamics of the market and consumer knowledge, are as strong as they could be."

New Zealand had the fifth-lowest petrol price in the OECD and every week the Ministry of Economic Development monitored petrol prices and published the findings on its website.

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"In my talks with the Automobile Association, we agreed that there may be scope for examining whether this monitoring could be improved still further," Ms Dalziel said.

- NZPA

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