Footnotes

Chapter 1 - Introduction and conduct of the inquiry

[1]        Other initiatives include reforms to trade practices legislation, the establishment of the GROCERYchoice website and requiring unit pricing in supermarkets.

[2]        Prime Minister and Assistant Treasurer; joint press release, 15 April 2008.

[3]        The latter bill amends the Trade Practices Act 1974 so that it covers Fuelwatch.

 

Chapter 2 - The Economics of Fuelwatch

[1]        Prices in financial markets, such as share prices and exchange rates are also volatile, but information and transactions costs are much lower in these markets so that prices quoted from different brokers will vary very little in contrast to the large differences in prices between service stations.

[2]        Senate Standing Committee on Economics (2006, p. 19).

[3]        This risk could be reduced by colluding with the other sellers to agree to all increase their prices, but this is illegal.

[4]        Mr Graeme Samuel, ACCC, Proof Committee Hansard, 7 August 2008, p. 12.

[5]        Mr Graeme Samuel, ACCC, Estimates Hansard, 5 June 2008, p. 21.

[6]        National Roads and Motorists Association, Submission 23, p. 2. A similar argument was made by Mr Aaron Rayner, WA Department of Consumer and Employment Protection, Proof Committee Hansard, 16 July 2008, p. 5.

[7]        Professor Wang, Submission 27, p. 6.

[8]        Mr Graeme Samuel, ACCC, Estimates Hansard, 5 June 2008, p. 22.

[9]        Mr Peter Callaghan, Commerce Queensland, Proof Committee Hansard, 18 July 2008, p. 15.

[10]      ACCC (2007, p. 13); Senate Standing Committee on Economics (2006, pp 5-7, 22). The Australian Institute of Petroleum correctly note that Australia has low petrol prices by international standards; Proof Committee Hansard, 11 August 2008, p. 18. However, the main reason for this is that Australia has relatively low taxes on petrol; among the 28 OECD economies in a comparison by the Department of Resources, Energy and Tourism only the three North American countries have lower taxes. On a pre-tax basis, petrol prices in Australia are similar to those in its peers; ACCC (2007, p. 45) and DRET cited in Submission 2a, p. 21.

[11]      Service Stations Association, Submission 7, p. 2. Similar views were put by the Motor Trades Association of South Australia, Proof Committee Hansard, 21 July 2008, p. 11 and Royal Automobile Club of Victoria, Proof Committee Hansard, 7 August 2008, p. 49.

[12]      Mr Mike Mullins, Gull Petroleum, Proof Committee Hansard, 16 July 2008, p. 13.

[13]      Mr David Moir, Royal Automobile Club of WA, Proof Committee Hansard, 16 July 2008, p. 24.

[14]      Mr Jim Murphy, Treasury, Proof Committee Hansard, 11 August 2008, p. 27.

[15]      WA's Consumer Protection Minister cited in report in West Australian, 9 October 2008.

[16]      Among those advocating more information for consumers are the Royal Automobile Club of Tasmania, Proof Committee Hansard, 11 August 2008, pp 11-12; Royal Automobile Club of Victoria, Proof Committee Hansard, 7 August 2008, p. 48; National Roads and Motorists Association, Proof Committee Hansard, 1 August 2008, p. 16; Choice, Proof Committee Hansard, 7 August 2008, p. 61; Royal Automobile Club of Queensland, Proof Committee Hansard, 17 July 2008, p. 11; National Seniors, Proof Committee Hansard, 11 August 2008, p. 14 and Professor Zumbo; Proof Committee Hansard, 1 August 2008.

One practical suggestion to improve information displayed on boards outside stations would to standardise colours in which different types of fuel are advertised; Flynx, Submission 36, p. 5. Similar ideas are expressed by Informed Sources, Submission 22a, p. 4.

[17]      Interim Report, p. 31.

[18]      ACCC (2007, p. 300).

[19]      Explanatory Memorandum, p. 7; Budget Paper no. 2, p. 291 and Estimates Hansard, 5 June 2008, pp 42­-3. This estimate of operating costs seems plausible given that the WA government currently spends $700 000 a year operating its FuelWatch system.

[20]      The Explanatory Memorandum says 'the estimated compliance cost for business is zero'.

[21]      Cited in Australian Automobile Association, Submission 19a, p. 19.

[22]      Mr Stephen Marshall, WIN Television, Proof Committee Hansard, 18 July 2008, p. 17. This is disputed by Informed Sources, who claim they never provided a 'firm quotation'; Submission 22a, p. 9.

[23]      Informed Sources, Submission 22a, p. 9.

[24]      Mr Timothy Kane, Service Station and Convenience Store Association of Queensland, Proof Committee Hansard, 17 July 2008, pp 5-6.

[25]      Mr Carew, APCO, Proof Committee Hansard, 7 August 2008, pp 45-7.

[26]      Informed Sources, Submission 22, p. 23.

[27]      The AIP estimates there are 784 independent petrol stations in Australia (Submission 2a, p. 8), but a tenth of these may be in Western Australia.

[28]      The committee heard that fuel price information is posted on websites by motoring associations in New South Wales, Victoria, Queensland, South Australia and Tasmania. Of course this is a cost the Western Australian motoring organisation does not incur as a Fuelwatch scheme already operates in WA. Other websites with fuel prices include one operated by a radio station in the Northern Territory; Mr Robert Bradley, Automobile Association of the Northern Territory, Proof Committee Hansard, 7 August 2008, p. 66. These were discussed in more detail in the Interim Report, pp 9-10.

[29]      Mr Alan Evans, National Roads and Motorists Association, Proof Committee Hansard, 1 August 2008, p. 16. Similarly, the Royal Automobile Association of South Australia 'invest very heavily in tracking price movements'; Ms Sharon Hanlon, Proof Committee Hansard, 21 July 2008, p. 2.

[30]      ACCC (2007, p. 299).

[31]      Mr Gordon Renouf, Choice, Proof Committee Hansard, 7 August 2008, p. 61.

[32]      At average earnings, two minutes of queueing or additional driving costs a dollar. There are 15 million cars registered in Australia ACCC (2007, p. 1). Allowing for some people with multiple cars, this implies over 13½ million motorists, so a dollar each for just a third of them would more than cover the annual running costs of Fuelwatch.

[33]      Mr Andrew Fischer, Australian Farmers Fuel, Proof Committee Hansard, 21 July 2008, p. 21.

[34]      The cycles have been around a long time but with gradual changes. A South Australian select committee (2001, p. 33) found 'a pattern of high prices around Tuesday/Wednesday chasing down to low prices around Sunday/Monday'. The term 'magic Tuesday' was coined by Mr Aivars Blums, Motor Trades Association of Queensland, Proof Committee Hansard, 17 July 2008, p. 1.

[35]      ACCC (2007, pp 14 and 136).

[36]      ACCC (2007, p. 14).

[37]      ACCC (2007, p. 137).

[38]      Mr Michael Ridley-Smith, Caltex, Proof Committee Hansard, 1 August 2008, p. 24.

[39]      The opinion poll commissioned by the ACCC in November 2007 showed that 70 per cent of motorists usually or always try to buy petrol when it is cheapest while 28 per cent just buy when they need it. The latter group includes many of the 8 per cent of customers for whom someone else (presumably mostly employers) pays for the petrol. An opinion poll conducted for the Australian Automobile Association showed that 49 per cent of motorists try to buy when petrol is cheapest, up from 41 per cent in 2005. ACCC (2007, pp 31-2).

[40]      ACCC (2007, pp 177-9, 290, 293).

[41]      Mr Terrence Conroy, Victorian Automobile Chamber of Commerce, Proof Committee Hansard, 7 August 2008, p. 33.

[42]      ACCC (2007, p. 31). 68 per cent of motorists were 'extremely concerned' about this, so presumably an even larger proportion believe it happens. See also Senate Standing Committee on Economics (2006, pp 26-7).

[43]      While the variation during the weekly cycle is typically 5-10 cents per litre, the average customer estimates it at 13 cents.

[44]      For example, Australian Institute of Petroleum, Submission 2a. and Royal Automobile Club of Victoria, Submission 24, p. 2.

[45]      Informed Sources suggests this happens when a large shipment arrives or there is a shutdown at a refinery; Submission 22, pp 25-6.

[46]      ACCC (2007, pp 162-3). An exception may be Norway, which has similar cycles; Informed Sources, Submission 22, p. 26.

[47]      ACCC (2007, p. 16). On their website, the ACCC describe the reasons for price cycles as 'complex' and include 'possible anti-competitive practices'.

[48]      ACCC (2007, pp 164, 350-2). The theory was first developed in Edgeworth (1925).

[49]      Informed Sources, Submission 22, pp 24-6; and Professor Wang, Submission 27.

[50]      It may go back to when workers were predominantly paid on a Friday and would fill the car up while out shopping on a Saturday morning; Neumann Petroleum, cited in ACCC (2007, p. 174). A similar explanation is put by Informed Sources, Submission 22, p. 25.

[51]      Australian Institute of Petroleum, Submission 2a, p. 14.

[52]      Cited in ACCC (2007, p. 177).

[53]      Although not using the term 'price discrimination', Professor Zumbo explains the cycle in essentially these terms; Proof Committee Hansard, 1 August 2008, p. 39.

[54]      Those on a 'date', wanting to go out with a large group of friends or not wanting a late night when working the next day may be willing to pay the higher price on a Saturday while individuals on a tight budget may prefer to buy the cheaper ticket on a Tuesday.

[55]      Mr Peter Fitzpatrick, Motor Trade Association of WA, Proof Committee Hansard, 16 July 2008, p. 19.

[56]      Mr Aaron Rayner, WA Department of Consumer and Employment Protection, Proof Committee Hansard, 16 July 2008, p. 5.

[57]      The difference between the low and high points of the cycle is typically 8-10 cents per litre (see Charts 3.1 and 3.2, and ACCC (2007, p. 157)) while the average margin between wholesale and retail prices over 2002-03 to 2006-07 was 4.7 cents per litre in Sydney, 4.9 cpl in Melbourne, 5.1 cpl in Brisbane and 3.7 cpl in Adelaide; ACCC (2007, appendix J). These estimates were supported by industry sources: 'the average amplitude of the cycle [in June 2008] was around 7 cents per litre', Australian Institute of Petroleum, Submission 2a, p. 15;  'the gross margin averaged close to 5 cents per litre in 2007-08', Australian Institute of Petroleum, Submission 2a, p. 14; 'in terms of the total costs of running a retail outlet of the size that we would normally run, you are probably looking at approximately 5c a litre to cover your costs'; Mr Wright, Neumann Petroleum, Proof Committee Hansard, 17 July 2008, p. 18; 'gross retail margin on fuel in metropolitan areas is usually of the order between two and three cents per litre', Motor Trades Association, Queensland, Submission 12, p. 1.

[58]      This was claimed by Mr Gary Fites, Royal Automobile Club of Queensland, Proof Committee Hansard, 17 July 2008, p. 12 and Mr Terrence Conroy, Victorian Automobile Chamber of Commerce, Proof Committee Hansard, 7 August 2008, p. 34. One witness suggested that if stations were charging a price below cost, this may not be in consumers' interests: 'in the United States, where they do have prohibition against below cost pricing, those prohibitions have led to a lower price being paid by consumers for petrol'; Professor Frank Zumbo, Proof Committee Hansard, 1 August 2008, p. 40.

[59]      The dissenting report in the Interim Report says 'clearly no station does so permanently'; p. 33.

[60]      Australian Institute of Petroleum, Submission 2a, p. 18. The point was reiterated by their Dr John Tilley, Proof Committee Hansard, 11 August 2008, p. 18.

[61]      For a further discussion, see ACCC (2007, pp 175-6) and references cited there.

[62]      Cited by the Hon Chris Bowen MP, House Hansard, 29 May 2008, p. 3870.

[63]      ACCC (2007, pp 280-1, 295–6). The dissenting report in the Interim Report also states that 'such price movements are unpopular'; p. 35.

[64]      44 per cent of motorists nationwide are 'extremely concerned' about intraday volatility (the national average being pulled down by Perth motorists where intra-day variation is prohibited). 63 per cent would prefer a uniform price all day even if this meant a less predictable weekly cycle. Given a choice 33 per cent of motorists would prefer no intraday variation and 48 per cent would prefer a lower average price. ACCC (2007, pp 280-1, 295–6).

[65]      ACCC (2007, p. 146).

[66]      ACAPMA, Submission 6, p. 2. Doubts were expressed in Karratha about the reasons given for petrol prices there being higher than in Perth given that the north-west is closer to sources of imported oil; Proof Committee Hansard, 14 July 2008.

[67]      ACCC (2007, p. 147).

[68]      ACCC (2007, p. 17).

[69]      Rockhampton Chamber of Commerce, Submission 3, p. 2.

[70]      Ms Leann Cooper, Karratha and Districts Chamber of Commerce and Industry, Proof Committee Hansard, 14 July 2008, p. 9.

[71]      Informed Sources, Submission 22, p. 14.

[72]      SEP Consultants, Submission 38; Informed Sources, Submissions 22, 22a.

 

Chapter 3 - FuelWatch in Western Australia

[1]        West Australian, 9 October 2008.

[2]        WA Department of Consumer and Employment Protection, Submission 5, p. 5.

[3]        Ms Anne Driscoll, WA Department of Consumer and Employment Protection, Proof Committee Hansard, 16 July 2008, p. 2.

[4]        Mr David Moir, Royal Automobile Club of Western Australia, Proof Committee Hansard, 16 July 2008, p. 24.

[5]        WA Department of Consumer and Employment Protection, Proof Committee Hansard, 16 July 2008, p. 5.

[6]        Royal Automobile Club of Western Australia, Submission 20, p. 2.

[7]        Ms Anne Driscoll, WA Department of Consumer and Employment Protection, Proof Committee Hansard, 16 July 2008, pp 2 and 5.

[8]        Mr Aaron Rayner, WA Department of Consumer and Employment Protection, Proof Committee Hansard, 16 July 2008, p. 3.

[9]        Mr David Moir, Royal Automobile Club of Western Australia, Proof Committee Hansard, 16 July 2008, p. 27.

[10]      WA Department of Consumer and Employment Protection, Submission 5a.

[11]      Concerned consumers, cited in WA Department of Consumer and Employment Protection, Submission 5a. The Department notes that 'no negative comments about FuelWatch were received by Consumer Protection'; Submission 5a, p. 3.

[12]      Mr Peter Fitzpatrick, Motor Trade Association of WA, Proof Committee Hansard, 16 July 2008, p. 19.

[13]      Mr Wayne Rowe, service station franchisee, Submission 11, p. 1; Caltex, Submission 14, p. 7; Woolworths, Submission 28, p. 8.

[14]      Ms Anne Driscoll, WA Department of Consumer and Employment Protection, Proof Committee Hansard, 16 July 2008, p. 3.

[15]      Senator the Hon. Eric Abetz, Proof Committee Hansard, 11 August 2008, p. 28.

[16]      Ms Anne Driscoll, WA Department of Consumer and Employment Protection, Proof Committee Hansard, 16 July 2008, p. 3. The comparison was done as at June 2008.

[17]      Prices for 16 and 18 September 2008, taken from motormouth.com.au, a subsidiary of Informed Sources.

[18]      ACCC (2007, p. 50).

[19]      ACCC (2007, p. 83). The WA limit is 0.1 per cent, compared to 1 per cent in the rest of Australia and 15 per cent in Europe (in other respects the Australian and European requirements are virtually the same as those in Europe). Informed Sources suggest this quality premium translates into a premium of 2 cents a litre; Submission 22, p. 12.

[20]      Smaller subsidies were removed in Tasmania and Victoria during 2007. The NT government has 1.1 cents a litre subsidy. NSW and SA have some subsidies in rural areas but not in Sydney or Adelaide. ACCC (2007, pp 88-90).

[21]      Woolworths estimates the difference in shipping costs is 1.3 cents a litre; Submission 28a, p. 1. Concept Economics suggests the rise in freight charges could have 'added as much as an additional cent to eastern state petrol prices compared to Perth petrol prices'; Submission 35, p. 36. BP gives a similar estimate; Submission 31a, p. 2.

[22]      The comparable figures were 3.7 cents in Adelaide, 4.7 cents in Sydney, 4.9 cents in Melbourne and 5.1 cents in Brisbane; ACCC (2001, p. 141 and Appendix J).

[23]      Mr Michael Ridley-Smith, Caltex, Proof Committee Hansard, 1 August 2008, p. 25.

[24]      Mr Gavan Jackman, BP, Proof Committee Hansard, 7 August 2008, p. 35.

[25]      Mr Trevor Rowe, Proof Committee Hansard, 14 July 2008, p. 17.

[26]      Both cited in ACCC (2007, p. 246).

[27]      The Royal Automobile Club of Victoria's David Cumming put this view; Proof Committee Hansard, 7 August 2008, p. 53. (Some odd things were mentioned as examples of differences; Mr Cumming drawing attention to the fact that Melbourne has a head office of a supermarket, and is in a valley, as reasons why Fuelwatch would operate differently there.) Mr Roger Featherston of the Law Council of Australia stated that 'other petrol markets in Australia may be structured differently to the Perth market. In terms of the nature of the independents and the nature of competition in those markets, the number of refiners in those markets and the number of import facilities and so forth'; Proof Committee Hansard, 1 August 2008, p. 3.

[28]      Professor Don Harding, Submission 4a, p. 19.

[29]      The dissenting minority in the Interim Report overstates the opposition; 'the majority of those giving evidence to the committee (Concept Economics, Access Economics, Professor Harding, Professor Zumbo) agreed the ACCC analysis was flawed' (p. 37). Access Economics did not give any evidence to the committee (although BP in their Supplementary Submission 31a after the Interim Report refers to some unpublished work by Access) and Professor Zumbo is a lawyer not an econometrician, who did not critique the ACCC's analysis himself. On the other hand, evidence from Treasury and Professor Gans supported the ACCC analysis.

[30]      ACCC (2007, 2008); Professor Davidson, Submission 17, p. 6; Professor Harding, Submission 4b, charts on pp 5-6 and regression results on p. 14; BP, Submission 31a; and Mr Henry Ergas, Concept Economics, Proof Committee Hansard, 11 August 2008, p. 2. It is also evident in the chart by Informed Sources, Submission 22, p. 11 and in the data from FUELtrac cited by the AAA, Submission 19a, p. 6.

[31]      Professor Wang Zhongming, Submission 27, p. 10.

[32]      The results compare the period August 1988 to December 2000 with that of January 2001 to June 2007.

[33]      Dr Stephen King, ACCC, Estimates Hansard, 5 June 2008, p. 39.

[34]      Submission 15.

[35]      Dr Stephen King, ACCC, Proof Committee Hansard, 7 August 2008, p.7.

[36]      Professor Wang Zhongming, Submission 27, p. 10. Similarly, Ms Anne Driscoll, WA Department of Consumer and Employment Protection, comments 'these same supermarket chains were establishing themselves and increasing their market penetration in the eastern seaboard at the same time as they were in WA'; Proof Committee Hansard, 16 July 2008, p. 10.

[37]      Similarly, rather than a constant impact, some witnesses thought the entry of the supermarket chains would lead to an initial decrease in prices but in the medium-term an increase in prices For example, Mr Aivars Blums from the Motor Trades Association of Queensland said that 'to construe a reduction in fuel prices by the majors is not a difficult circumstance for them if they so desire. The question is for how long will the fuel price reduction exist in any circumstance';  Proof Committee Hansard, 17 July 2008, p. 8. It is claimed this is what happened in Europe when the large supermarket chains entered the retail petrol market; Mr Peter Fitzpatrick, Motor Trade Association of WA, Proof Committee Hansard, 16 July 2008, p. 20.

[38]      This criticism was made by Professor Don Harding (Submission 4a) and by Opposition senators at June 2008 estimates hearings.

[39]      Mr Jim Murphy, Proof Committee Hansard, 11 August 2008, pp 29, 37; Estimates Hansard, 4 June 2008, p. 85. There was no evidence provided supporting the contention of the dissenting minority senators that 'Treasury was among the government departments which had reservations about the national Fuelwatch scheme'; Interim Report, p. 39. (The senators may have based this statement on the assertion by Professor Davidson; Submission 17, p. 9.) Indeed Treasury's Jim Murphy explicitly said 'we support Fuelwatch'; Proof Committee Hansard, 11 August 2008, p. 35.

[40]      Mr Henry Ergas, Concept Economics, Proof Committee Hansard, 11 August 2008, p. 2.

[41]      Submission 1, p. 2.

[42]      Informed Sources referred to some data being provided under 'written formal contracts'; Proof Committee Hansard, 17 July 2008, p. 21. The ACCC chairman has referred to subpoenaing some data; Estimates Hansard, 5 June 2008, p. 11.

[43]      Informed Sources referred to their data as 'commercially a very valuable item' which they guard very closely; Proof Committee Hansard, 17 July 2008, p. 22.

[44]      Informed Sources, Submission 22a, p. 7.

[45]      Mr Graeme Samuel, ACCC, Proof Committee Hansard, 7 August 2008, p.7. This interpretation is given some support by the comments by Professor Harding who said after his first paper attacking Fuelwatch came out, 'Informed Sources gave the data to me. They said they were impressed with my work. It was not available to other academics'; Professor Don Harding, Proof Committee Hansard, 7 August 2008, p. 24. Informed Sources confirmed that they had refused to release their data to Professor Gans; Submission 22a, p. 8.

[46]      ACCC (2007, pp 247, 375-7); ACCC (2008); and Dr Stephen King, ACCC, Estimates Hansard, 5 June 2008, p. 51.

[47]      For further discussion, see Mr Joe Dimasi, ACCC, Estimates Hansard, 5 June 2008, pp 19 and 40.

[48]      Serially correlated errors might be introduced by interpolating 13 observations from quarterly CPIs given that fuel prices do not move smoothly.

[49]      Dr Stephen King, ACCC, Proof Committee Hansard, 7 August 2008, p. 6. Mr David Martine from Treasury was also concerned about a possible 'bias' introduced by Professor Harding's approach; Proof Committee Hansard, 11 August 2008, p. 40.

[50]      Submission 17.

[51]      Henry Ergas, 'Kevin 24-7 or 7-11', The Australian, 3 June 2008.

 

Chapter 4 - Fuelwatch and independent operators

[1]        Northern Territory Government, Submission 37, p. 3.

[2]        Claims along these lines were made by Mr Peter Fitzpatrick, Motor Trade Association of WA, Proof Committee Hansard, 16 July 2008, pp 17, 20; Mr Adrian Ellson, Pilbara Regional Council, Proof Committee Hansard, 14 July 2008, p. 7; Mr Aivars Blums, Motor Trades Association of Queensland, Proof Committee Hansard, 17 July 2008, p. 2; Mr Kruys, Motor Trades Association of South Australia, Proof Committee Hansard, 21 July 2008, p. 13; Mr Andrew Fischer, Australian Farmers Fuel, Proof Committee Hansard, 21 July 2008, p. 18; Mr David Russell, Victorian Automobile Chamber of Commerce, Proof Committee Hansard, 7 August 2008, p. 28; Mr Peter Anderson, APCO, Proof Committee Hansard, 7 August 2008, p. 45.

[3]        Mr Topham, Caltex, Proof Committee Hansard, 1 August 2008, p. 27. The ACCC (2007, p. 11) also suggest that volume purchased is the most important factor determining wholesale prices

[4]        The four oil companies (Shell, Caltex, Mobil and BP) and the two supermarket chains (Coles and Woolworths) between them account for 100 per cent of refining, over 90 per cent of importing, over 95 per cent of wholesaling, and over 90 per cent of retailing; ACCC (2007, pp 6-7 and 77). The ACCC identified a number of impediments to any large scale importing of petrol by a rival firm; ACCC (2007, p. 20).

[5]        ACCC (2007, pp v, 12, 199).

[6]        ACCC (2007, p. 23). The new Fuel Commissioner-designate has indicated he will be focusing on impediments to competition in wholesale markets; The Australian, 2 October 2008.

[7]        Mr Graeme Samuel, ACCC, Proof Committee Hansard, 7 August 2008, p. 14.

[8]        AIP, Submission 2a, pp 6, 9. The ACCC (2007, p. 32) refer to a survey by the AAA which found that 79 per cent of motorists had used shopper dockets during 2007.

[9]        A survey conducted for the ACCC showed that 29 per cent of motorists do not check prices at other service stations before using a shopper docket; ACCC (2007, p. 195).

[10]      Mr Robert Anderson, APCO Service Stations, Proof Committee Hansard, 7 August 2008, p. 41.

[11]      AA Holdings, Submission 34, p. 3.

[12]      Rockhampton Chamber of Commerce, Submission 3, p. 2.

[13]      Gans and King (2004, p. 312).

[14]      Mr Cumming, Royal Automobile Association of Victoria, Proof Committee Hansard, 7 August 2008, p. 49.

[15]      Mr Gordon Renouf, Choice, Proof Committee Hansard, 7 August 2008, p. 62.

[16]      Shopper dockets are discussed further in ACCC (2004) and ACCC (2007, chapter 12 and Appendix Q). The ACCC (2004, p. 40) defined 'third line forcing' as ' the supply by one party of a discount or other offering in relation to goods or services on condition that the purchaser has acquired goods or services from a third party'.

[17]      Mr Charles Wright, Neumann Petroleum, Proof Committee Hansard, 17 July 2008, p. 15. A similar argument was put by Mr Roger Featherstone, Law Council of Australia, Proof Committee Hansard, 1 August 2008, p. 2.

[18]      Mr Andrew Fischer, Australian Farmers Fuel, Proof Committee Hansard, 21 July 2008, p. 19.

[19]      Professor Joshua Gans. Proof Committee Hansard, 7 August 2008, p. 60.

[20]      Among variants suggested are discounts for locals, happy hours, lucky dips and member discounts; Informed Sources, Submission 22, p. 15. See also Mr Roger Featherston, Law Council of Australia, Proof Committee Hansard, 1 August 2008, p. 2.

[21]      Mr Jim Murphy, Treasury, Proof Committee Hansard, 11 August 2008, pp 32-3.

[22]      Mr Andrew Fischer, Australian Farmers Fuel, Proof Committee Hansard, 21 July 2008, p. 19.

[23]      WA Department of Consumer and Employment Protection.

[24]      Gull Petroleum, cited in ACCC (2007, p. 246). Concerns about this rolling price strategy are also expressed by the Australasian Convenience and Petroleum Marketers Association, Submission 6, p. 5; the Trade Practices Committee of the Business Law Section of the Law Council of Australia, Submission 21, p. 5; Royal Automobile Club of Queensland, Submission 8, p. 4; and Informed Sources, Submission 22, pp 16-7.

[25]      Mr Barrie Cassidy, ACCC, Proof Committee Hansard, 7 August 2008, p. 14.

[26]      RACWA, Submission 20, p. 4.

[27]      This sort of behaviour was alleged by Mr Trevor Rowe, 'it seems to me that Woolworths are going to be cheaper until that competitor has left the market, and then you will have the same issue: up go the prices'; Proof Committee Hansard, 14 July 2008, p. 13.

[28]      Mr Roger Featherston, Law Council of Australia, Proof Committee Hansard, 1 August 2008, p. 2.

[29]      Mr Andrew Fischer, Australian Farmers Fuel, Proof Committee Hansard, 21 July 2008, p. 18.

[30]      Mr Peter Anderson, APCO, Proof Committee Hansard, 7 August 2008, p. 45.

[31]      Mr Roger Featherston, Law Council of Australia, Proof Committee Hansard, 1 August 2008, p. 3.

[32]      Mr Graeme Samuel, ACCC, Proof Committee Hansard, 7 August 2008, p. 14.

[33]      Mr Barrie Cassidy, ACCC, Proof Committee Hansard, 7 August 2008, p. 14.

[34]      A service station owned by an independent operator, but having the branding of an oil company or independent chain. This type of site makes up a majority of regional sites.

[35]      These are sites that are owned by a large independent company. In Western Australia, these companies are Gull, Peak and United. These sites are predominantly located in the Perth metropolitan area.

[36]      These are sites that have no branding, and are owned by an independent operator.

[37]      WA Department of Consumer and Employment Protection, Submission 5, p. 13.

[38]      Mr David Moir, Royal Automobile Club of Western Australia, Proof Committee Hansard, 16 July 2008, p. 26.

[39]      Mr Michael Ridley-Smith, Caltex, Proof Committee Hansard, 1 August 2008, p. 25.

[40]      Mr Mike Mullins, Gull Petroleum, Proof Committee Hansard, 16 July 2008, p. 13.

[41]      Mr Mike Mullins, Gull Petroleum, Proof Committee Hansard, 16 July 2008, p. 12.

[42]      Mr Charles Wright, Neumann Petroleum, Proof Committee Hansard, 17 July 2008, p. 16.

[43]      Mr Jim Murphy, Treasury, Proof Committee Hansard, 11 August 2008, p. 36.

 

Chapter 5 - Legal aspects

[1]        The Prices Justification Tribunal (1973-1981), Petroleum Products Pricing Authority (1981‑1984) and Prices Surveillance Authority (1984-1998).

[2]        ACCC, Petrol Prices and Australian Consumers, December 2007.

[3]        This view is attributed to Tom Hughes QC in an article in The Age, 9 June 2008, p. 8. It is also raised by Caltex, Submission 14, pp 5-6 and Australian Institute of Petroleum, Submission 2a, p. 28.

[4]        Estimates Hansard, 4 June 2008, pp 88-100.

[5]        Mr David Martine, Treasury, Proof Committee Hansard, 11 August 2008, p. 34.

[6]        Caltex, Submission 14, pp 6-7. Similar concerns were expressed by Mr Aivars Blums, Motor Trades Association of Queensland, Proof Committee Hansard, 17 July 2008, p. 2.

[7]        Mr Roger Featherston, Law Council of Australia, Proof Committee Hansard, 1 August 2008, p. 4. Nor did the Motor Trades Association of Australia; Submission 16, p. 5.

[8]        Mr Aivars Blums, Motor Trades Association of Queensland, Proof Committee Hansard, 17 July 2008, p. 2.

[9]        BP, Submission 31, p.7.

[10]      AIP, Submission 2a, p. 28.

[11]      Mr Roger Featherston, Law Council of Australia, Proof Committee Hansard, 1 August 2008, pp 3, 9.

[12]      Mr Jonathan Kennedy, National Seniors Australia, Proof Committee Hansard, 11 August 2008, p. 13.

[13]      Professor Joshua Gans, Proof Committee Hansard, 7 August 2008, p. 55.

[14]      NRMA, Submission 23, p. 2.

[15]      Explanatory Memorandum, p. 12.

 

Chapter 6 - Summary and conclusions

[1]        Interim Report, p. 1.

[2]        The same argument applies to measures such as unit pricing, which can also empower consumers to compare prices and find the best deal.

 

Coalitions Senators' Dissenting Report - Executive Summary – watching prices won’t bring them down

[1] Fuel Price Vow, Sunday Times, 30 March, 2008 (Walker later claimed to be misquoted but did not seek to correct the public record until questioned at a Senate Estimates hearing)

[2] Australian Competition and Consumer Commission, December 2007

[3] Questions Without Notice, 28 May, 2008

[4] Matter of Public Importance, 14 May, 2008

[5] ABC Insiders  programme, 17 August, 2008

[6] National FuelWatch (Empower Consumers) Bill 2008, Explanatory Memorandum

[7] Royal Automobile Association of South Australia, letter commenting on Interim Report, p. 1

[8] [8] Royal Automobile Association of South Australia, letter commenting on Interim Report, p. 3

[9] Andrew Fischer Managing Director and Shareholder, Australian Farmers Fuel Pty Ltd, Senate Committee Hansard, Senate Standing Committee on Economics, 21 July, 2008,  p 19

[10] Executive summary, Getting a Fair Deal for Western Australian Motorists, Select Committee on Petroleum Products Pricing in Western Australia, October 2000

[11] WA Department of Consumer and Employment Protection, Submission to the Senate Inquiry into the Proposed National FuelWatch Scheme, July 2008

[12] Ibid, p 6

[13] Proof Committee Hansard, Standing Committee on Economics, 16 July, 2008, p 5

[14] Proof Committee Hansard, Standing Committee on Economics, 16 July, 2008, p 10

[15] Ibid, p 16

[16] WA Department of Consumer and Employment Protection, Submission to the Senate Inquiry into the Proposed National FuelWatch Scheme, July 2008, p 17

[17] Committee Hansard, Standing Committee on Economics, 1 August, 2008 pp 39, 40

[18] Australian Bureau of Statistics, 9309.0 - Motor Vehicle Census, Australia, 31 Mar 2007 

[19] Petrol Prices and Australian Consumers, 15.1.3, Price transparency arrangements for consumers in Australia, WA FuelWatch, p 243

[20] ibid., p 247

[21] Petrol Prices and Australian Consumers, 15.1.3, Price transparency arrangements for consumers in Australia, WA FuelWatch., p 257

[22] ibid., p 254

[23] Petrol – Further Econometric Analysis Undertaken by ACCC, 29 May, 2008

[24] Committee Hansard, Standing Committee on Economics, 7 August, 2008, p 22

[25] Ibid, 1 August, 2008, p 40, 41

[26] Ibid, 11 August, 2008, p 7

[27] Dr Stephen King, ACCC Commissioner, The Australian, 30 May, 2008, p6

[28] Senate Committee Hansard, Standing Committee on Economics, 17 July, 2008, p 22

[29] Ibid, p 58

[30] Senate Committee Hansard, Standing Committee on Economics, 11 August, 2008, p 2

[31] Senate Committee Hansard, Standing Committee on Economics, 11 August, 2008,, p 3

[32] Ibid

[33] Submission to Senate Economics Committee Inquiry, 15 August, 2008, p 2

[34] Ibid

[35] Ibid

[36] RACQ Submission to Senate Economics Committee FuelWatch Inquiry, July 2008, p 2

[37] Committee Hansard, Standing Committee on Economics, 1 August, 2008, p 41

[38] Craig Glasby, President, Service Station Association, Committee Hansard, Standing Committee on Economics, 1 August, 2008 p 32

[39] Professor Frank Zumbo, Senate Committee Hansard, Standing Committee on Economics, 1/ August, 2008,  p 39

[40] Ibid, p 40

[41] Ibid, p 38

[42] Laurie Oakes, Channel 9 news, 28^th May 2008

[43] Proof Committee Hansard, Senate Standing Committee on Economics, 11 August, 2008 p 29

[44] Ibid, p 29

[45] Para 30, Regulation Impact Statement, Petrol Price Transparency and Competition, 29 May, 2008

[46] Para 33, Regulation Impact Statement, Petrol Price Transparency and Competition, 29 May, 2008

[47] Ibid

[48] Para 34, ibid

[49] Ibid

[50] Para 56, ibid

[51] Para 57, ibid

[52] Para 59, Regulation Impact Statement, Petrol Price Transparency and Competition, 29 May, 2008

[53] Para 60, ibid

[54] Para 108, ibid

[55] Para 112, ibid

[56] Alan Evans, NRMA, Senate Committee Hansard, Senate Standing Committee on Economics, 1 August, 2008, p 11

[57] NRMA Submission to Senate Economics Committee FuelWatch Inquiry, July 2008, p 2

[58] NRMA, Submission to Senate Economics Committee FuelWatch Inquiry, 16 July, 2008, p  2

[59] David Moir, Senate Committee Hansard, Senate Standing Committee on Economics, 16 July, 2008, p 24

[60] Ibid, p 25

[61] RACQ, Submission to Senate Economics Committee FuelWatch Inquiry, July 08, p 3

[62] RACQ, Ibid, p 6

[63] RACV, Submission to Senate Economics Committee FuelWatch Inquiry, July 08, p 4

[64] Matthew Hanton, Senate Committee Hansard,  Senate Standing Committee on Economics, 21 July, 2008, p 2

[65] Ibid, p 5

[66] RACQ, Submission to Senate Economics Committee FuelWatch Inquiry, July 08, p  6

[67] David Cumming, Senate Committee Hansard, Senate Standing Committee on Economics,7 August, 2008, p 48

[68] Senate Committee Hansard Senate Standing Committee on Economics, 1 August, 2008, p 31

[69] Gary Fites, RACQ, Senate Committee Hansard, Senate Standing Committee on Economics, 17 July, 2008, p 9

[70] Roger Featherston, Law Council of Australia, Senate Committee Hansard, Senate Standing Committee on Economics, 1 August, 2008, p 7

[71] Andrew Fischer Managing Director and Shareholder, Australian Farmers Fuel Pty Ltd, Senate Committee Hansard, Senate Standing Committee on Economics, 21 July, 2008, p 19

[72] Sellers back petrol scheme, The Age, 26 June, 2008

[73]Para 14, Regulation Impact Statement, Petrol Price Transparency and Competition, 29 May, 2008

[74] Para 23, ibid

[75] Senate Committee Hansard Senate Standing Committee on Economics, 17July, 2008, p 22

[76] Senate Committee Hansard, Senate Standing Committee on Economics, 17 July, 2008, p 22

[77] Senate Committee Hansard, Senate Standing Committee on Economics, 1 August, 2008, p 38

[78] Matthew Hanton RAA, Senate Committee Hansard, Senate Standing Committee on Economics, 21 July, 2008, p 6

[79] Gary Fites, RACQ, Senate Committee Hansard, Senate Standing Committee on Economics, 17 July, 2008, p 11

[80] Ibid

[81] http://www.news.com.au/technology/story/0,25642,24388834-5014239,00.html

[82] Andrew Fischer, Australian Farmers Fuel, Committee Hansard, Adelaide, 21^st July

[83] Table 4, WA Department of Consumer and Employment Protection, Submission to Senate Inquiry into the Proposed National FuelWatch Scheme, July, 2008

[84] Table 3, ibid

[85] Table 1, Additional Information, Volume of Sales Data, DoCEP, July, 2008

[86] Senate Committee Hansard, Senate Standing Committee on Economics, 16 July, 2008, p 18

[87] Theodoor Kruys, Chairman, Service Station Division, Motor Trade Association SA, Senate Committee Hansard, Senate Standing Committee on Economics, 21 July, 2008, p 14

[88] Roger Featherston, Member, Trade Practices Committee, Business Law Section, Law Council of Australia, Senate Committee Hansard, Senate Standing Committee on Economics, 1 August, 2008, p 2

[89] Terrence Conroy, Victorian Automobile Chamber of Commerce, Senate Standing Committee on Economics, Melbourne Hearing, 7 August, 2008, p 33

[90] Craig Glasby, President, Service Station Association, Senate Committee Hansard, Senate Standing Committee on Economics, 1 August, 2008, p 33

[91] Nicholas Moulis, General Manager, Australasian Convenience and Petroleum Marketers Association, Senate Standing Committee on Economics, 7 August 2008, p 21

[92] David Russell, Senior Manager, Government and Public Affairs, Victorian Automobile Chamber of Commerce, Senate Committee Hansard, Senate Standing Committee on Economics, 7 August, 2008, p 28

[93] Aivars Blums, Group Chief Executive, Motor Trades Association of Queensland, Senate Committee Hansard, Senate Standing Committee on Economics, 17 August, 2008, p 2

[94] Roger Featherston, Member, Trade Practices Committee, Business Law Section, Law Council of Australia, Senate Committee Hansard, , Senate Standing Committee on Economics, 1 August, 2008, p 2

[95] David Cumming, Senate Committee Hansard, , Senate Standing Committee on Economics, 7 August, 2008, p 48

[96] Timothy Kane, Chairman, Service Station and Convenience Store Association of Queensland, Committee Hansard, , Senate Standing Committee on Economics, 17 July, 2008, p 5

[97] Gary Fites, RACQ, Senate Committee Hansard, , Senate Standing Committee on Economics, 17 July, 2008, p 9

[98] Michael Roth, Executive Manager Public Policy, Royal Automobile Club of Queensland, Senate Committee Hansard, , Senate Standing Committee on Economics, 17 July, 2008, p 11

[99] Mr Peter Anderson, Director, APCO Service Stations Pty Ltd, Proof Committee Hansard, , Senate Standing Committee on Economics, 7 August 2008, p. 41

[100] Proof Committee Hansard, Senate Standing Committee on Economics, 17 July, 2008, p 15

[101] Para 74, Regulation Impact Statement, Petrol Price Transparency and Competition, 29 May, 2008

[102] Para 75, ibid

[103] Mr Matthew Hanton, Senior Analyst, Royal Automobile Association of South Australia, Senate Committee Hansard, Senate Standing Committee on Economics, 21 July, 2008, p 5

[104] Jonathan Kennedy, Senior Policy Officer, National Seniors Australia, Senate Standing Committee on Economics, 11 August, 2008, p 16

[105] David Cumming, RACV, Senate Committee Hansard, Senate Standing Committee on Economics, 7 August, 2008, p 50

[106] Nicholas Moulis, General Manager, Australasian Convenience and Petroleum Marketers Association, Senate Committee Hansard, Senate Standing Committee on Economics, 7 August, 2008, p 17

[107] Getting a Fair Deal for Western Australian Motorists, Select Committee on Petroleum Products Pricing in Western Australia, October 2000

[108] Professor Frank Zumbo, Senate Committee Hansard, Senate Standing Committee on Economics, 1August, 2008, p 41

[109] Nicholas Moulis, General Manager, Australasian Convenience and Petroleum Marketers Association, Senate Standing Committee on Economics, 7 August, 2008, p 18

[110] John Chapman, Executive Director, Motor Trade Association SA, Senate Committee Hansard, Senate Standing Committee on Economics, 21 July, 2008, p 10

[111] Gary Fites, RACQ, Senate Committee Hansard, Senate Standing Committee on Economics, 17July, 2008, p 11

[112] Craig Glasby, President, Service Station Association, Senate Committee Hansard, Senate Standing Committee on Economics, 1 August, 2008, p 36

[113] Roger Featherston, Member, Trade Practices Committee, Business Law Section, Law Council of Australia, Senate Committee Hansard, Senate Standing Committee on Economics, 1 August, 2008, p 2

[114] David Cumming, Senate Committee Hansard,  Senate Standing Committee on Economics, 7 August, 2008, p 54

[115] John Chapman, Executive Director, Motor Trade Association SA, Senate Committee Hansard, Senate Standing Committee on Economics, 21 July, 2008, p 11

[116] Theodoor KRUYS, Chairman, Service Station Division, Motor Trade Association SA, Senate Committee Hansard, Senate Standing Committee on Economics, 21 July, 2008, p 17

[117] Department of Consumer and Employee Protection, Supplementary Submission

[118] Proof Committee Hansard, Canberra, 11^th August 2008, p. 37

[119] Craig Glasby, President, Service Station Association, Senate Committee Hansard, Senate Standing Committee on Economics, 1 August, 2008, p 32