Mr GIBBONS (3:03 PM) —I have a question for the Assistant Treasurer. I ask: will the minister outline to the House the impact that high world oil prices are having on working families and what measures the government is taking to introduce more transparency into the petrol industry?

Mr BOWEN (Minister for Competition Policy and Consumer Affairs, and Assistant Treasurer) —I do thank the honourable member for Bendigo for his question. I can report to the House that overnight the price of the benchmark West Texas Intermediate crude oil rose to a new high of $100.83 a barrel. The price of the benchmark used for Australian petrol purposes, the Singapore Mogas 95, rose to $108.04 a barrel. The basis of this increase was speculation that OPEC, at their meeting on 5 March, will cut production. This development underlines the importance of the government’s approach. We have always said, in opposition and in government, that when world oil prices are so high it is important that there are extra efforts to ensure transparency and competition in the Australian petrol market, to ensure Australian motorists are not paying one cent more than they need to at the bowser.

These increases have an effect on Australian working families. As CommSec has pointed out, the average Australian household is forking out $189.50 a month on petrol, which is up $27 a month on the past year. Just as concerning is the flow-on effect. Every good for sale in an Australian shop has transport as a component of its price. When petrol prices go up the transport component of those prices also goes up. So this has an inflationary effect. It is because of these impacts on working families and because of the impact on inflation that the government have taken the action that we have since the election: the issue of formal monitoring powers to the ACCC and the appointment of Australia’s first petrol commissioner. And that is why we recognise and say very clearly that there is more to do. We will continue to work with the ACCC and the petrol commissioner on the range of measures that the ACCC recommended for further consideration in their petrol report handed to the government in December.

When oil prices are so high it is particularly important that we ensure that there is no undue divergence between the price of oil in Singapore and the price of petrol in Australia. In other words, there will always be a difference between the price of oil in Singapore and the price of petrol in Australia because of production costs, refining costs, transport costs and profit margin. But it is important that the ACCC continues to monitor that divergence and ensures that it is no greater than could be justified by the market. This divergence, the ACCC tells me, is normally in the order of 60c a litre. From time to time the ACCC notices this creeping up. This happened twice in the last two years.

Mr Dutton —Mr Speaker, I rise on a point of order. It is on relevance. The question really was going to: when and by how much will the petrol price come down in this country?

The SPEAKER —The member for Dickson will resume his seat. There is no point of order.

Mr BOWEN —The ACCC advise me that normally the divergence is around 60c a litre but from time to time they see this creep up. They advise me that they have seen it rise to as much as 67c a litre. Under the previous government, the ACCC had one policy option to deal with this—begging. They would beg the petrol companies to give the Australian motorists a fair go. Honourable members might recall the newspaper article on the front page of the Daily Telegraph on 16 January 2007 in which the Chairman of the ACCC was reduced to begging the Australian oil companies to reduce their prices and give Australian motorists a fair go.

Under our government there is a different approach. The Chairman of the ACCC and the petrol commissioner actually have some powers. They are not reduced to asking, requesting and begging the petrol companies to explain. On 18 December, less than two weeks after the Rudd government were sworn in, we issued the ACCC with formal monitoring powers, as, during the election campaign, we had committed to do. I can report to the House that the ACCC has used those formal monitoring powers. Recently, when noticing an increase in the divergence between the price of oil in Singapore and the price of petrol in Australia, the commission utilised the powers given to it by the government under part 7A of the Trade Practices Act and wrote to the oil companies under its formal monitoring powers. The ACCC advises me that, after those formal monitoring powers were used, it found that the divergence disappeared and that the difference between the price of oil in Singapore and the price of petrol in Australia returned to usual and normal measures. This is the advice to me from Graeme Samuel, the Chairman of the ACCC.

The government has always said that there are no easy answers to this question. There are no magic bullets and no simple solutions. That is what we said in opposition and that is what we say in government. We also say that we will do everything in our power to ensure there is transparency and competition in the Australian petrol market. We also say that we will not do what they did and ignore the problem. We also say that we will do what they never had the wit to do: we will use every measure in our power to ensure Australian working families get a fair go, that there is competition in the Australian petrol market and that it is not the comfortable oligopoly they let run for 11 years.