Government ministers say they will act "swiftly" to break supply dominance of big fuel companies with measures to improve competitiveness and transparency in the retail fuel market.

The Commerce Commission has recommended major petrol suppliers face a wholesale pricing regime and have their supply contracts regulated in order to improve competition in the wholesale fuel market.

Among a raft of recommendations in a near 600-page report the commission is also regulating wholesale supply contracts to give resellers more freedom to compare offers and switch suppliers.

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In response to the findings out this morning, Minister of Energy and Resources, Megan Woods said: "This is about breaking the big fuel companies' stranglehold on supply and getting more competition into the market to benefit consumers."

The study found a lack of competition in wholesale markets and the Government would be introducing the best options to increase competition at a wholesale level, which will filter down to the retail market and prices on the forecourt.

"A more competitive wholesale market means that low cost brands, like Waitomo and NPD, would be able to access cheaper fuel and pass these benefits onto consumers. Other retailers would be forced to adjust their prices or risk losing customers," said Woods.

The report also found that fuel dealers and distributors have limited ability to switch suppliers due to restrictive terms in their contracts and the Government would look to introduce a mandatory industry code to regulate the conduct of participants in the fuel industry.

The Government will now take the commission's recommendations to Cabinet with a view to swiftly implementing changes, such as:

• A more transparent wholesale pricing regime

• Greater contractual freedoms and fairer terms to facilitate wholesale competition

• Introducing an enforceable industry code of conduct


• Improve transparency of premium grade fuel pricing

But National says the Government is squarely to blame for Kiwis being "fleeced" at the petrol pump, having milked half a billion dollars out of motorists in just two years through its fuel tax hikes.

National's transport spokesman Chris Bishop said New Zealanders were being ripped off at the petrol pump and it is the Government which is picking their pockets through all the fuel tax hikes it has introduced these past two years.

The extra revenue it has collected from increased fuel excise, road user charges and the Auckland Regional Fuel Tax has already hit $565 million or $319 per household.

"Prime Minister Jacinda Ardern is the fleecer-in-chief. Her Government's tax grab will hit $1.7 billion once further tax hikes – already passed into law – take effect down the line.''

Commerce and Consumer Affairs Minister Kris Faafoi said the commission report confirmed concerns that consumers were paying higher prices for petrol and diesel than could be expected in a competitive market.

The Government would look at requiring retailers to display both regular and premium petrol prices on service station price boards.

"I'll be encouraging retailers to make those changes as soon as possible," Faafoi said.

He also saw merit in adding premium fuel prices to the Ministry of Business, Innovation and Employment's current monitoring of regular grade petrol and diesel margins so consumers have a better awareness of price trends.

"The report has found there is action required in several key areas and the steps we're going to take to address these will make the retail fuel market fairer for all New Zealanders."