Z Energy, BP and Waitomo Group have challenged the Commerce Commission's claims that a lack of competition in the fuel sector is delivering participants excess returns.

Z Energy, the country's biggest fuel retailer, says it has discovered a number of inaccuracies in the commission's draft findings on profitability, including a misrepresentation of Z's 2016-2018 rate of return as about 22 per cent, about double Z's independently reviewed calculations of about 11 per cent, chief executive Mike Bennetts said.

The study had also used the wrong number of shares the company had on issue, inflating its market value by $181.5m, had ignored $158m of goodwill booked at the time Z bought the Caltex fuel distribution business from Chevron NZ, used the wrong concept for assessing depreciation, and a deferred tax liability had been accounted for in a way unsupported by the relevant literature, according to a report Z commissioned from Victoria-based consultancy Incenta.

Setting aside the "material errors" in various parts of the analysis, Z said it has concerns about the "light touch" approach the commission had taken and the messages that might send to interested parties and the public.

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"Multiple short-hand approaches do not verify a concrete overall view - i.e. that firms are earning persistently high profits, justifying action," the company said in its 39-page submission.

"Nor is it sufficient for the draft report to acknowledge the uncertainty inherent in its analysis of profitability. Regardless of any disclaimers, the analysis colours the findings in the draft and is used to justify recommendations."

The commission's draft report last month said fuel retailers' average returns had consistently exceeded the regulator's estimate of their weighted average cost of capital since Shell sold its local business in 2010. At that rate they could be earning close to $400m a year in excess returns.

It found all the players were earning at least twice the 8.6 percent return it estimated as the upper bound for the industry's weighted average cost of capital.

Gull was the highest at about 28 percent, followed by a grouping of Waitomo, NPD and GAS at almost 25 per cent, and Z Energy at almost 23 per cent. Mobil and BP came in at close to 20 per cent and 18 per cent respectively.

Discount provider Waitomo, one of the fastest-growing independent chains, requested greater clarity as to how the commission derived its figures which it said "do not reflect" the company's earnings.

It said any analysis of the group's returns needs to consider both its retail and commercial fuel activities and it is "both unfair and misleading" not to consider the group as a whole.

BP, the country's second-largest fuel retailer was blunt.

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Fuel retailers had not made "excess profits" over time. The sector had experienced both high margins and unsustainably low margins, and the recent high margins were attracting new entrants just as they had in the late 1990s.

"The substantial - and ongoing - growth of independent retail chains, and therefore the growth of overall retail capacity in a flat to declining market, is the strongest possible indicator of strong competition at both the wholesale and retail levels," BP said in its 43-page submission.

"No amount of theory can undermine the fact that commercial firms are making these investments and expanding, which is precisely what you would expect in a workably competitive market.

"The contrary findings in the draft report are based on material factual inaccuracies and conclusions that cannot be supported by the facts as presented. In particular, the factual matrix and reasoning relating to the operation of the supply chain, the impact of entry and expansion in retail markets and profitability have fundamental flaws."

The commission's market study is the first under new powers the regulator was granted last year.

The government wanted the $10 billion a year retail fuel industry investigated further after a 2017 study led by the Ministry of Business, Innovation and Employment found fuel pricing in some parts of the country may not be reasonable.