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Ramsay questions ACCC response.



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WHYALLA OFFICE: PORT PIRIE OFFICE:

45a Playford Avenue WHYALLA SA 5600 104 Ellen Street (PO Box 296) PORT PIRIE SA 5540 Phone: (08) 8645 4255 / Phone: (08) 8633 1744

Phone: 1300 301 651 (local call cost) Phone: 1300 301 742 (local call cost)

Fax: (08) 8645 5933 Fax: (08) 8633 1749

ROWAN RAMSEY MP Member for Grey

RAMSEY QUESTIONS ACCC RESPONSE

Federal Member for Grey Rowan Ramsey has claimed in a statement to Federal Parliament he seriously questions reasons given for the disparity in fuel prices in Whyalla by the ACCC.

In response to a letter he wrote to the ACCC outlining the excessive cost of fuel in Whyalla, particularly diesel, the ACCC using information from a report done last year stated the main factors for the high cost of fuel in country areas are smaller populations, greater distances from terminals, less competition and lower volumes.

Mr Ramsey said the explanation simply does not account the unreasonable premiums in the Whyalla market, where the cost of diesel is regularly at least ten cents a litre more than other regional cities.

In his statement to parliament Mr Ramsey said, “Whyalla has the second- or third-largest regional population in the state and, as a result, outlets fill frequently. It is only 380 kilometres from Adelaide and 270 kilometres from Port Lincoln— both fuel terminals—equating to a freight differential of between 2c and 3c per litre, and there are at least seven outlets in the city. Nearby centres have significantly cheaper prices than Whyalla—in fact, Port Augusta, just 80 kilometres up the road, and nearer to Adelaide, is averaging diesel prices 15c a litre lower”.

He said he is not happy with the response and will be going back to the ACCC pointing out the flaws in their argument. “If the ACCC is not interested or do not have the power to intervene in the Whyalla market they should tell us in plain language”’ Mr Ramsey said.

While frustration in the community is understandable, Mr Ramsey implores people not to take this out on driveway attendants. “The issue highlighted in the Whyalla News of people abusing petrol attendants is totally unfair,” he said. “Problems with fuel pricing are happening much higher up the marketing chain than the driveway attendants and they should be treated with respect. “Our fight is against the fuel suppliers and wholesale prices.”

A copy of his statement is below-

STATEMENTS BY MEMBERS Fuel Prices

Mr RAMSEY (Grey) (6.51 p.m.)—I take this opportunity to inform the House of the absolute malfunction of fuel pricing in regional South Australia and, in particular, the regional city of Whyalla, and the apparent impotency or complete lack of concern shown by the ACCC. Over the last three months, petrol in Whyalla has been as much as 10c a litre dearer than in Adelaide and, even more disturbingly, diesel has been 20c a litre dearer. Given that the cost of freight from Adelaide to Whyalla is only about 3c a litre—and we are talking here about one of the biggest regional markets in South Australia—it is apparent that the competitive market is failing.

I raised the issue with the ACCC and recently received a response. The commission uses information from a report from last year to explain that the main factors for higher fuel prices in country areas are smaller populations, greater distances from terminals, less competition and lower volumes. It points out that, because country sites refuel less often than city outlets, price drops take longer to work their way through the system. I refute all of these arguments. Whyalla has the second- or third-largest regional population in the state and, as a result, outlets fill frequently. It is only 380 kilometres from Adelaide and 270 kilometres from Port Lincoln—both fuel terminals—equating to a freight differential of between 2c and 3c per litre, and there are at least seven outlets in the city. Nearby centres have significantly cheaper prices than Whyalla—in fact, Port Augusta, just 80 kilometres up the road, and nearer to Adelaide, is averaging diesel

WHYALLA OFFICE: PORT PIRIE OFFICE:

45a Playford Avenue WHYALLA SA 5600 104 Ellen Street (PO Box 296) PORT PIRIE SA 5540 Phone: (08) 8645 4255 / Phone: (08) 8633 1744

Phone: 1300 301 651 (local call cost) Phone: 1300 301 742 (local call cost)

Fax: (08) 8645 5933 Fax: (08) 8633 1749

prices 15c a litre lower. For the ACCC to tell Whyalla citizens, through me, that a 20c premium for diesel is all part of the natural cycle is totally unacceptable. Either the ACCC has no teeth or it doesn’t care.

Media Contact: Leonie Lloyd-Smith (08) 8633 1744 October 15, 2008