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Wednesday, 13 September 2006
Page: 12

Senator O’BRIEN (10:06 AM) —The weakness in the government’s argument on this matter is demonstrated by evidence that the Senate Standing Committee on Economics has taken from various petrol retailers through its current inquiry, and also from the comments that various retailers have made on the public record about their inability to obtain the same terms as their competitors in the same small market—the same town. Some independents are saying that they are not able to purchase their fuel at the same price as their competitors who are being supplied by the large companies. So Senator Joyce ought to think carefully about the concern that he had because—although I understand that some people might think it is advantageous that on the occasion that they get a slightly better deal they do not want people to know about it—overall in the market place if one business is, for no reason other than the preference of the supplier, getting a better deal and that better deal is not available to the independents, Senator Joyce will be defeating the arguments that he has placed on the record about the need to ensure that independents are not forced out of the market. It is obviously the case that, if these arrangements have to be transparent, the ability to do different deals will not be available. That would be, I think, a better thing for the market.

I agree with Senator Murray that the suggestion that discounting would disappear is just not borne out by the facts. What happens when there is fuel that needs to be sold, when the wholesaler needs to move fuel on because more fuel is coming and tries to encourage retailers to buy at a particular time in the cycle because of these needs? That is going to ensure that there is more urgency about marketing the fuel in stock, and that will have an impact on discounting. There are a variety of reasons why discounting will continue, and blanket suggestions that somehow this regulatory arrangement will mean the abandonment of discounting are demonstrably wrong, I think.

Let’s look at the situation in the Perth retail market, where service stations have to notify the public of their price each morning and may not vary it. Does that end discounting? No. Does it give the public a better knowledge of what is going to be available during the day? Yes. Does it mean that price boards do not vary several times during the day? Yes. Does that mean that buyers have better knowledge in the market? Yes. You can always mount an argument about why secrecy might end a particular advantageous circumstance in the market, but overall the benefits of transparency in this very, very important market outweigh, in our view, the concerns about the lack of transparency in some commercial arrangements. This is a very important commodity to the Australian market and to transport, and to the extent that we can have a clear understanding of what is taking place we will arm the consumer and the retailer.