Commerce Commission probe possible as Government looks at ways to ease petrol prices

The Government is looking at ways to ease the price of petrol, including giving new powers to the Commerce Commission. Photo / Peter Meecham

The Government says motorists may be overpaying for petrol and it wants to keep pressure on fuel companies, but prices at the pump are unlikely to drop in time for the Christmas break.

Energy and Resources Minister Megan Woods said she was in discussions with officials about how to have "fairness in fuel pricing", adding that the evidence suggested that customers were paying too much.

She is due to receive an updated report on the petrol market on Thursday that was ordered by her predecessor, National's Judith Collins.

The previous Government looked at giving powers to the Commerce Commission to conduct a market study without evidence of collusion, which would require companies to provide information they have previously refused to release.

Woods said that empowering the Commission remained a "live option".

A study from the Ministry of Business, Innovation and Employment, released in July, questioned whether the market was acting competitively and found a dearth of information after Mobil and Gull refused to provide it.

It also said that prices in Wellington and the South Island had increased at a greater rate in recent years than in the upper North Island, where competition is more fierce.

Thursday's updated study is expected to include detailed responses from the industry to July's report.

Petrol prices this week hit the highest level in three years. Motorists in central Wellington were paying the national price of 214.9c per litre of 91 unleaded, up from 191.9c a year ago.

But the regional price varied. It was 4c cheaper in Wellington suburbs, while in Levin and Masterton it was under 200c a litre.

Woods said asking the Commerce Commission to investigate would take some time.

"There would have be changes made to the Commerce Act for the Commerce Commission to do that market test, so I'm also looking at what other options we can put in place so we can start addressing, right from the get-go, the issue that if you live in Wellington or the South Island, you're likely to be paying more for your fuel."

She said discussions with officials centred on short- and medium-term options, but the evidence suggested that motorists were overpaying.

"It warrants further investigation to see how we can ensure that people are paying a fair price for their petrol."

Opposition leader Bill English welcomed Woods' approach of continuing the work of the previous Government, but added there was little the Government could do in the short-term.

"I don't think there's any action the Government can take to drop fuel prices for the Christmas break. It's up to the fuel companies. Unless there's some change to the law, they will continue to price petrol in a way they regard as competitive.

"It's a difficult issue to deal with."

He said the July report "never really got to the bottom" of the reason for regional differences.

"The information that was gathered never really satisfactorily explained how that works, other than that people will pay, so they price it higher in some places."