Fuel price gouging. War profiteering and government dissembling
· Michael West
Greedy fuel companies are taking advantage of war, while politicians tell us how they’ll deal with the greedy fuel companies, but don’t. Rex Patrick with the story.
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On March 4, five days after the first US bombs had dropped on Tehran, Treasurer Jim Chalmers stood up in the House of Representatives at question time and answered a fuel price ‘Dorothy Dixer’ question from a Labor backbencher. His reply:
“…I wrote to the ACCC to make sure that service stations are not engaging in price gouging, that they’re not taking Australian motorists and Australian consumers for mugs.”
MWM gave it a few days and then FOI’ed the ACCC to see what their plans were for dealing with fuel price gouging. Meanwhile, the price of fuel was rising faster than home loan interest rates after a Reserve Bank rate increase announcement.
Turns out, there was no letter, and there is no plan to address price gouging.
Shipping latency
The Iran war started on 28 February. The crude oil that left the UAE on 27 February had between 17 and 26 days of sailing time to reach Australia, so one might have thought prices would not alter too much in the next 17 days.
Wishful thinking, the price of fuel rose almost immediately.
Source: Australian Institute of Petroleum
No plan
In response to the Freedom of Information request for the fuel gouging policing plan, the ACCC advised that the requested document does not exist!
ACCC Freedom of Information Response
Did they just ignore the Treasurer?
If the ACCC were inclined to ignore the Treasurer, they should have paid attention to Prime Minister Anthony Albanese when he stood up in the House of Representatives on March 23 and stated:
“That’s why our government is taking action with the plan for Australia’s fuel security by securing fuel supply for Australian industry and households, cracking down on price gouging, through the actions of the ACCC”
Or perhaps they may have heard the Foreign Minister Senator Penny Wong on the same day as the Prime Minister when she stated in the Senate:
“That’s why the government is taking action securing fuel supply for Australian industry and households, cracking down on price gouging and working to mitigate the impacts from global energy price spikes.”
Or Industry Minister Time Ayres, following close behind, telling the Senate,
We’re cracking down on petrol price gouging.
It’s hard to imagine how ministers thought it would be OK to say that. The price of diesel in Melbourne on 23 March, when pre-war ships were still arriving at our terminals, was at $2.88 a litre, a 77% increase over pre-war prices. At the time of writing, it’s $3.20.
No power to act
On 25 March, the Treasurer introduced the Treasury Laws Amendment (Doubling Penalties for ACCC Enforcement) Bill. As the name of the Bill suggests, it doubles fines for certain market misconduct under the national competition law.
Whilst everyone on ‘Team Labor’ was selling it as the ‘anti-price gouging Bill’, Senator Nick McKim stood up in the Senate on 26 March and ‘belled the cat’:
“Minister, I just want to see whether you’re prepared to put your credibility on the line and join with the Treasurer, Mr Chalmers; the Leader of the Government in the Senate, Senator Wong; and Minister Ayres by suggesting that this bill addresses price gouging in the fuel sector. The reason I’m interested in that is that we in the Greens have a very strong view that both Minister Ayres and Minister Wong have misled the Senate by claiming that this bill addresses price gouging, and I want to lay out precisely why that is.
“This bill doubles penalties for existing provisions in Australia’s competition and consumer law. Those existing provisions are things that make misleading or deceptive conduct, cartel behaviour and other things unlawful but which actually don’t make price gouging unlawful. Anyone who’s an expert in this area—including, I might add, Professor Allan Fels—will tell you that there is no provision in Australian law that makes price gouging unlawful except for the provision that you introduced last year that makes price gouging unlawful in the supermarket sector.
“My question to you, Minister, is: if the existing body of consumer law in Australia is so deficient that you needed to introduce something to make supermarket sector price gouging illegal, how is it that you can claim that existing laws actually address price gouging across the rest of the economy?”
In other words, although the bill doubles penalties for unlawful conduct,
price gouging is not considered unlawful.
The Bill passed both Houses that day as the price of diesel in Melbourne hit more than $3 a litre.
Deceptive conduct
On 30 March, following a meeting of the National Cabinet, Anthony Albanese announced he was halving fuel excise on petrol and diesel for three months, stating, “The halving of the fuel excise will reduce the cost of fuel by 26.3 cents per litre.”
The price of diesel in Melbourne on that day was about what it is today.
I don’t think there’s much trust for our fuel supply companies at the present moment. And there certainly isn’t much trust for some of our ministers. All we motoring mugs have to do is visit a petrol station for the ugly truth.
ACCC Postscript
The ACCC sent MWM the ‘we have no plan’ FOI response on 7 April.
Someone must have read it after a good night’s sleep and thought – it didn’t look so good.
Two days later, they sent MWM an unsolicited email showing that they are watching, having meetings, warning fuel companies and putting out both reports and media releases.
They also drew our attention to one investigation they are carrying out – on the unavailability of diesel to independent wholesalers and distributors servicing regional and rural Australia.
There’s no investigation into fuel price gouging, though. There is, as we know, no plan to go anywhere near that issue.