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Senate Committee report into petroleum retail legislation repeal bill 1998

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PARLIAMENT HOUSE CANBERRA ACT 2600 Tel: (02) 6277 3510 Fax: (0 2 )6 2 7 7 5811 E-mail:

Senate Committee Report into Petroleum Retail Legislation Repeal Bill 1998

The Chairman of the Senate Rural & Regional Affairs & Transport Legislation Committee, Senator Winston Crane, (Lib, WA), today announced that the release of the Committee's report on the Petroleum Retail Legislation Repeal Bill 1998. The Bill repeals the Petroleum Retail Marketing Sites Act 1980 and the Petroleum Retail Marketing Franchise Act 1980. The Bill forms part of the Government strategy for deregulation of the petroleum products industry and removal of barriers to

competition created by government regulation.

The Chairman said that the Committee, in the course of its inquiry, endeavoured to provide a logical way forward, which involved: ❖ Extensive discussions with all major participants beyond the hearing process; ❖ Ongoing consideration of both sides of the argument in terms of modifying report


The report recommends that the repeal of the two acts proceed with the following amendments: _ ❖ the completion and tabling of the Oilcode in the Parliament as a regulation pursuant to Part IVB of the Trade Practices Act 1974; and ❖ establishment of an appropriate dispute-settling mechanism to arbitrate disputes with regard to

access according to the franchise agreement. Such a mechanism would deal with such issues as: > competitive tendering for transport from terminal to site, and > access to the company terminal providing the best price regardless of location.

The suggested amendment delays the repeal of the Petroleum Retail Marketing Sites Act 1980 for two years after Royal Assent to allow for further review by this Committee. The amendment leaves it open to the Senate to pass a resolution adopting a recommendation of a Senate Committee that the Petroleum Retail Marketing Sites Act 1980 not be repealed. Unless such a recommendation is made

and adopted by the Senate within the time limits specified, the Petroleum Retail Marketing Sites Act 1980 will be repealed after 2 years.

Further recommendations are: * ❖ that the Government, as part of the reform package, require a review of refiner/marketer company performance against commitments by the Rural and Regional Affairs and Transoort Committee within the time frame set out above; ❖ that the Government investigate the establishment of a 'structural adjustment fund', for the

purpose of assisting in site remediation and thereby enhance the eponomic benefit of the site to the owner, or to compensate the owner/operator for the loss of the capital asset and investment on exit.from the industry; ❖ that appropriate transitional arrangements are put in place to ensure that franchisees with existing

contracts are not disadvantaged as a result of the amendments to the legislative regime.

Obviously, the Committee's recommendations in relation to the repeal of the Franchise Act are contingent upon agreement to a concluded Oilcode by all major parties and appropriate arrangements being put in place to oversee access.

TheGhairman commended the goodwill shown by the major parties to the dispute and their willingness to participate in a number of round table discussions in order to facilitate the Committee's inquiry. The entry of significant independents since 1980 has meant that the retail fuel industry must

now move on and operate under different rules. The Committee welcomes MTAA's decision to respond quickly through its four national councils.

The Committee stands ready to assist and looks forward to the completion of the process through the inquiry to be undertaken prior to repeal of the Sites Act taking effect. The deferral of the repeal of this Act will allow the Committee in its review to test progress against the benchmarks for.further development outlined by the oil companies at public hearings. The deferral will give the Minister an opportunity for further development of Government strategy to accommodate the structural change currently taking place within the industry.

The Chairman is confident that the recommendations in the Committee's report will lead to cewer price fluctuations in metropolitan areas and over time, some reduction in fuel prices in most country areas.

Contact fo r comment - Senator Winston Crane - 08 9470 4442 [Western Australia], 02 6277 3845 [Parliament House], 0418 917 890 [Mobile] Contact fo r information - Committee Secretary (Andrew Snedden) - 02 6277 3510