Rudd’s petrol scheme to tackle petrol pricing by requiring stations to reveal their figures the day before is all about taking the pressure off the politicians regarding fuel prices jumping 10 cents a week, which motorists might not understand is actually competition at work in the fuel business. Politicians are actually going to take that away.

If this plan is brought in, as an independent, I will tend to be less aggressive in terms of dropping my prices because, if I drop it too far too quickly, I could lose a lot of money very quickly. So I am going to be very cautious in lowering our prices. Of course, when you are cautious in lowering prices you are also cautious in how far you go down because you don’t know when it is going to go back up.

I’ve spoken to a number of politicians over the years and they have no idea how we run our business. They don’t realise that I look after the pricing of my business on the run. I make decisions on pricing minute-by-minute, every time I take a call from a franchisee, about how far I will go down. If they tell me Shell is at this price, I might say go down a bit more. But this plan will take that freedom away from me.

This last Sunday morning I made 21 phone calls on fuel pricing to my network. I won’t be able to do that under this plan because I will have to come into my office on Sunday, analyse what the market is doing and decide what I am going to do to petrol prices at 6am the next day. Currently I can drive the price lower on a Monday or a Tuesday or Wednesday if that’s what’s needed to get people through the door, but this new plan will make that impossible. And obviously the consumer stands to lose in that scenario too.

The customer today, on Wednesday, is buying fuel from me at below my operating costs. Chris Bowen is saying you can take an extra 2 cents a litre out of fuel, but today my margin is .66 cents per litre. So where does Bowen’s 2 cent saving come from? He can’t tell us. Other than a document produced by the ACCC for the last fuel inquiry, can anybody obtain the cold hard facts that back that figure up? No. Can it be found anywhere? No. Can I find it anywhere? No. And how do we know the ACCC hasn’t made an error? The ACCC had three years to get a document correct to present to the Federal Court in a recent Geelong price fixing case, and they couldn’t even get that right.

I think we need to have more than an ACCC report to support implementation of laws which will have a huge impact not only on me but on my franchisees. Now that we won’t be able to match or beat cheaper prices in the market, we will also see a drop in our shop sales, which will also damage those businesses. 

Has the fact that this plan will kill off once and for all the independent fuel retailers been properly considered? What about effect that has on competition? The government has not consulted us on this. We can have the 2020 Summit to discuss the future of Australia but we can’t talk to the last remaining independent fuel retailers to discuss how this idea will affect their businesses and the fuel pricing.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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