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Thursday, 22 May 1980
Page: 3145

Mr Jacobi asked the Minister for Business and Consumer Affairs, upon notice, on 20 February 1980:

(   1 ) How will the Government determine current freight costs for the purposes of the extended petroleum product freight subsidy scheme.

(2)   What is the estimated cost of the new scheme in each State for (a) the remainder of 1979-80 and (b) a full year.

(3)   As the cost to taxpayers of the subsidy scheme will increase substantially will the Government order a thorough review of petroleum transport costs, and will he examine the points raised in my question No. 940 to his predecessor (Hansard, 8 June 1978, page 3389).

(4)   Has his attention been drawn to a claim by a correspondent to the Adelaide Advertiser on 1 S February 1 980, that consumers in the Riverland of South Australia are paying S cents a litre more for petrol than in Mildura and more than residents in Alice Springs.

(   5 ) If so, can he state why this is so.

Mr Garland - The answer to the honourable member's question is as follows:

(1)   The extended petroleum product freight subsidy scheme applies current freight differential costs found justified by the Prices Justification Tribunal.

(2)   Estimated cost in each State:



(3)   In my predecessor's answer of 8 June 1 978 (to Question No. 940 of 13 April 1978) to the honourable member, details were given concerning the role of the Prices Justification Tribunal. Nothing new can be added to that information other than to emphasise the ongoing review role of the Tribunal in considering all submissions put to it in relation to costs associated with the transport of petroleum products to country areas. Freight differentials found justified by the Tribunal form the basis of freight subsidy calculations.

(4)   Yes.

(5)   Wholesale prices for petrol are subject to the Prices Justification Act and maximum justified prices are determined for each of the oil companies by the Prices Justification Tribunal. However, the companies may charge less than the maximum justified wholesale prices and in practice, prices to resellers vary depending on the state of competition in particular locations and on other factors.

Retail prices for petrol are outside the ambit of the Prices Justification Tribunal as the Tribunal is concerned only with prices charged by companies. Retail prices are to some extent a function of the competition which exists in a particular market and this often accounts for the disparity between retail prices charged in different localities.

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