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Wednesday, 3 November 1976

Mr HOWARD (BENNELONG, NEW SOUTH WALES) (Minister for Business and Consumer Affairs) - I am aware that a lot of concern has been expressed, not only in Western Australia but also in such places as Tasmania and Newcastle about marketing practices in the petroleum industry. The House will be aware that the Government has under consideration at the moment the recommendations contained in the fourth report of the Royal Commission into Petroleum and Petroleum Products. We also have under consideration recommendations of the Trade Practices Review Committee which in some areas have relevance to this subject.

For many years there existed in the Austraiian petroleum industry arrangements between oil companies and independent dealers whereby those dealers were tied to particular companies and in return for that guaranteed supply the companies tended to provide relatively long term leasing arrangements and also other financial incentives and help. As a result of a determination of the Trade Practices Commission which applied the existing trade practices legislation, those arrangements are no longer regarded in their entirety as being acceptable. One of the consequences of that determination has been to encourage the oil companies, for commercial reasons, to change some of their marketing practices. I think that, before one jumps to too many conclusions as to who is right and who is wrong in this area, it ought to be borne in mind that it is very difficult in an industry such as the petroleum industry to accommodate completely in the one stroke the interests of consumers, the interests of the small dealers and also the natural desire of large companies with heavy capital investment to secure their points of distribution.

The activities of ACTU-Solo are, of course, relevant to the Government's consideration. I ° should make it clear that the Government would not want a situation where price flexibility in the petroleum industry was eliminated. It is not in the interests of the consumer to eliminate price flexibility; it is in his interests that there be price flexibility. The Government is concerned also that independent dealers as a class should not be forced out of business.

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