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Monday, 7 November 2005
Page: 9

Mr BYRNE (1:01 PM) —I move:

That this House:

(1)   notes the alarming and rapid increase in fuel prices in the South-eastern suburbs of Melbourne and across Australia;

(2)   recognises the severe implications of exorbitant fuel prices for local businesses and family budgets;

(3)   acknowledges residents’ concerns about reported instances of possible price gouging practises within the petroleum refining and distribution industry; and

(4)   asks the Treasurer to direct the Australian Competition and Consumer Commission to formally monitor prices under Part VIIA of the Trade Practices Act 1974.

In driving around Berwick Springs—in fact around Berwick Discount Fuel—in January this year when the price of petrol was 93c a litre, no-one could have possibly dreamt that that very same discount fuel retailer would be selling petrol for $1.39 a litre in September. This has occurred as a consequence of a number of natural phenomena—hurricanes et cetera—and overseas conflict. However, it has been very interesting to study the behaviour of the oil companies over the past three or four months—in particular, since the price spike in September. I believe that their behaviour has contributed to the high cost of petrol. Their behaviour has resulted in unnecessary price increases, which are reflected in the prices of goods, such as groceries and fruit, that are sold to families in Holt and in business operating expenses.

If you look at petrol prices when they peaked in the week between 5 and 12 September, you see that they ranged from $1.28 a litre in Brisbane to $1.39 a litre in Hobart. In fact, there was a peak, as I said, of $1.39 a litre in my area in September. This was a huge increase in the price of petrol. The price of petrol now in that same area is about $1.20, as I speak. This price rise has had substantial impacts on families in Holt. The family watch committee, of which the member for Ballarat is chair, has indicated that it has contributed at least $10 extra a week to the cost of fuel.

My electorate has the highest rate of mortgages in Australia and, in effect, that petrol price increase was like an interest rate increase. It wiped out the tax cuts. If you speak to families in the region, they tell you that they are very worried about how, for example, they are going to service their debt. They are a very leveraged community. If you talk to someone like Derek West, who is the President of the Cranbourne Chamber of Commerce, he will tell you that local businesses are being charged transport levies or surcharges for the distribution and delivery of goods. These levies are hurting local business, particularly in the Cranbourne area. In one instance this has added about seven per cent to business costs for delivery and distribution, and the levy has increased more than once this year—and it has continued to increase. There are ripple increases as a consequence of the still high cost of petrol. If you talk to people in the Cranbourne information and support service, they will tell you that additional families are seeking relief as a consequence of the price of petrol.

If it were just natural and overseas factors that determined the price of petrol then one could say that this rise was as a consequence of the war in Iraq or a hurricane. But it is very instructive to look at the behaviour of the oil companies during this time. The Australian Automobile Association believe that there was petrol price gouging of about 15c a litre in September of this year. Victorian Automobile Chamber of Commerce research shows that when the price is 90.9c per litre, for example, the oil companies get about 37.5 per cent—that is for exploration, extractions, refining and equipment cost. It is about 41 per cent of the cost of petrol to the consumer. With a price of $1.39 per litre, the take of the oil companies is about 72.8c a litre. Their take is effectively doubled.

It has been reported to the VACC by a number of members that they believe that the oil companies have increased their refiner margins. They believe that their margins are about 8c to 10c per litre higher than they should be. Further research by the VACC shows that on 8 September the retail high of unleaded petrol in metropolitan Melbourne was $1.39.9 per litre. The retail low on the same day was $1.24.9 per litre. The terminal gate price—that is, the price at which petrol is sold—was $1.25 a litre. So how do you account for that massive price discrepancy? At this stage, the terminal gate price, which is the benchmark, is $1.20.9 a litre, but petrol it is now retailing at $1.23 a litre. So how can there be this massive price differential between the terminal gate price and advertised spike in September and the gate price and price of petrol now? This adds to the fact that oil companies cannot be trusted. They are also not being monitored. They should be monitored properly, and I call upon the Treasurer to implement part 7 of the act and direct the ACCC to monitor oil prices.

The DEPUTY SPEAKER (Mr Lindsay)—Is the motion seconded?

Ms King —I second the motion and reserve my right to speak.