Our man in the press gallery, Hugo Kelly, ponders the nexus between National Party regional rorts and petrol policy:
Want to know how governments act to crush independent business while
protecting multinational oil cartels? And the link between taxpayer
funded National Party slush funds and energy policy? And how the local
industry cheer squad pretends this is sound policy and eggs the whole
Well, read on. We thought something was up on Wednesday when the head
honcho of the Australian Automobile Association (AAA), Lauchlan
McIntosh, dropped a press release “congratulating the Minister for
Industry, Tourism and Resources, the Hon Ian Macfarlane MP on his
decision to proceed with retail petrol reform and with the introduction
of an industry Oilcode.”
Which sounds nice, not to mention good old fashioned brown-nosing
politics: http://www.aaa.asn.au/press.htm But it’s what you don’t
see in the press relase that matters. For some context, we turn
veteran political insider Rob Chalmers, who tells subscribers to his
‘Inside Canberra’ briefing today:
“There is something odd about the $1.2 regional partnership grant to
Primary Energy Ltd for a proposed $100 million ethanol plant. It could
be more than just a slush fund handout for election purposes in the
electorate of the Nationals Leader John Anderson.”
Because it’s Friday, and because Chalmers is onto something very
smelly, we’ll do an Alan Ramsey and quote great slabs of ‘Inside
Canberra’ on the ethanol slush fund and its links to petrol politics.
“Primary Energy Ltd is apparently serious about the plant. Director
Matthew Kelley says he has been encouraged to apply for a Biofuel
Capital Grants Scheme. This week Nationals Senate Leader Ron Boswell,
in talking up the argument to mandate an ethanol percentage in petrol
told the Financial Review: ‘People are not going to build plants unless
there is a market for biofuel.’ Exactly.
“We believe Primary Energy has been given the nod that there will be a
market for its ethanol. The key is Ian Macfarlane’s press statement on
Tuesday. The minister proposes to give the oil majors everything
they have been pressing for since the Howard Government came to power:
repeal of the Petroleum Sites and Franchising Acts which will
allow them complete horizontal monopolisation of the industry.
“We believe in return for this deal the Government will not have to
mandate a percentage of ethanol in petrol. The oil majors will
voluntarily agree to meet the Government’s target of 350 million litres
of biofuels, about 1% of the fuel market by 2010, moving to
5.75% by 2018.
“Under Macfarlane’s “reform” thousands of service stations will be
closed down, particularly in rural and regional areas so that the
market will be concentrated in fewer retail sites which will be more
profitable and which will be owned and controlled by the oil majors.
“Existing franchisees (servos) will lose their property rights without
entitlement to proper compensation. This is because the Sites Act,
which limits ownership of service stations by the oil majors to
425 sites will be repealed. Contracts which servos have with oil
companies state that if the Sites Act is repealed their property rights
will be extinguished. Macfarlane will have an OilCode which will make a
pretence of protecting servos, but will be irrelevant once the Sites
Act is repealed.
“Macfarlane’s press release is a masterpiece of mendacity:
He says the Sites Act is “outdated” when it is the only protection
servos have from the ruthless power of the oil companies. He talks of
independents being given access to wholesale terminal gate pricing, but
they won’t be able to compete. New standards for petrol will make it
difficult for independents to import petrol.
“Independents may get fuel at terminals at a wholesale price, fixed at
the discretion of the oil companies, but they can’t compete because the
oil companies give their servos price support – a discount.
Independents certainly can’t now compete with shopper docket schemes at
Caltex and Shell outlets. When the servos are driven out of the
business, the independents will have no hope.
“Macfarlane says his scheme was ‘blocked by Labor’. Wrong, it was
blocked by the Nationals who feared service stations being closed down
in the bush. Now it appears the Nationals will sacrifice these servos
for the sake of ethanol.
His claim that ‘a majority of industry participants supported Oilcode’
in 2003 is an invention. He says he is introducing his scheme ‘for the
sake of motorists and petrol retailers.’ Rubbish, it is
being introduced for the sake of the oil companies and a deal on
ethanol. Nowhere in the press statement does Macfarlane suggest pump
prices will fall because of his initiative.
“What the Primary Energy project again demonstrates is the preference
for grain over sugar as a feedstock for ethanol. Boswell is very keen
on ethanol, but how is he going to overcome the preference for grain,
which will stand in the way of a serious industry in Queensland based
How, indeed. Not to mention how to justify a policy that will give Big
Oil a cosy ride at the expense of what used to be the Coalition’s constituency – small business.