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New bill will lower petrol prices: Joyce -

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PETER CAVE: A private members bill to stop large petrol companies from forcing independent stations
out of business has been launched in western Sydney. The bill is the idea of the National's Senate
leader Barnaby Joyce and Independent Senator Nick Xenophon.

It aims to stop the large oil companies from lowering their prices to deliberately undercut smaller
petrol retailers. If the bill passes it will mean that the lowest petrol price charged by any
service station will have to be matched by all the company's other stations in the same city.

Senator Joyce says he's prepared to cross the floor if his Coalition colleagues don't support his
bill.

David Mark reports.

DAVID MARK: Marie El-Khoury has owned her independent petrol station at Blacktown in Sydney's west
for 10 years. And every day, she says, she's being undercut by the big oil companies - particularly
Caltex and Shell through their affiliates Woolworths and Coles.

MARIE EL-KHOURY: I'll give you an example. Every day whatever you price, in a second you find them
pricing under.

DAVID MARK: She's become so frustrated that at times she's sold her petrol at massively discounted
prices, she says, to make a point.

MARIE EL-KHOURY: We're losing our business slowly, quietly. So I thought if I'm going to lose, you
know, and I'm going to be put in that spot, this is where if I'm going to lose, let me lose by
choice. So we're trying to make a stand.

DAVID MARK: The problem, says Ms El-Khoury is that the major companies can buy petrol at seven
cents a litre cheaper than she can.

MARIE EL-KHOURY: Undercutting, undercutting, trying to show people that they are competitors, that
they can, they're offering the consumer the best prices, the best deals and killing other business,
driving you know all the consumers away from other people's businesses. And once they kill the
other businesses this is where they hijack the prices.

DAVID MARK: But isn't that just competition at work?

MARIE EL-KHOURY: It's competition at work when it's fair competition.

DAVID MARK: The Nationals Senate leader Barnaby Joyce agrees. He's launched a private members bill
with the independent Senator Nick Xenophon in Ms El-Khoury's honour - naming it "The Blacktown
Amendment". The aim is to stamp out so-called geographic price discrimination.

BARNABY JOYCE: What this bill does, it says that, you know, if someone goes into an area and says,
well I'm going to knock out a business, a private fuel retailer or you know, a private store, by
reducing my price around that store, it says that like in other countries that would be against the
law. If you reduce your price there you'll have to reduce your price within that geographic area.

DAVID MARK: Competition law specialist Frank Zumbo helped draft the legislation.

FRANK ZUMBO: The way the law will work is that in location A, if Shell for example, Coles drop
their price to 99 cents they will then have to drop their price to 99 cents at location B, a second
Coles outlet. If location B then is within 35 kilometres of location C, a third Coles outlet, the
price at that location C will have to also drop to 99 cents.

DAVID MARK: So what this essentially means it that the lowest Coles operator in any given city will
set the benchmark. That lowest price will become the price throughout the city.

FRANK ZUMBO: Exactly. And that's the beauty of the Blacktown Amendment. It will be pro-discounting.
It will deliver a better result for consumers because when Coles drops their price at one location
they'll have to drop the prices at all their locations in that same geographic area.

DAVID MARK: Senator Joyce says he's willing to cross the floor to get the legislation up, but it
seems he won't get the chance. The Federal Minister for Competition Policy and Consumer Affairs
Chris Bowen says the Government won't support the bill.

CHRIS BOWEN: No we won't because this is a measure which would increase petrol prices. I know
that's not their intention but that would be the result. All the evidence is that the best way of
reducing petrol prices is competition, not by artificial government barriers.

DAVID MARK: Well they say such legislation will increase competition. Why do you say it won't?

CHRIS BOWEN: Well because when you have a government authority going around making sure that
everybody is charging the same price everywhere, you're not encouraging competition. You're
discouraging competition.

DAVID MARK: Chris Bowen says independent petrol stations are already protected by predatory pricing
laws.

CHRIS BOWEN: And that means where one service station, in this example, consistently undercuts
another service station with the intention of sending that business out of business and then
increasing their prices afterwards because they've done that. And we've actually loosened the
predatory pricing laws to make it easier for the ACCC to prove where that's happening.

PETER CAVE: The Federal Minister for Competition Policy and Consumer Affairs Chris Bowen, ending
David Mark's report.