By RNZ
The Commerce Commission needs to come down like “a tonne of bricks” on any petrol stations involved in price gouging, Consumer NZ says.
Many motorists around the country say they are paying more for fuel than their neighbouring towns, with some travelling out of their way to get better bang for their buck at the pumps.
Consumer NZ chief executive Jon Duffy told RNZ’s Checkpoint if this problem was widespread across New Zealand, the Commerce Commission should begin an investigation.
“The problem we have here is that it seems to be that there is a group of retailers within a region, setting the price at a much higher level than what other regions that will have similar input costs, for example the cost of transporting the fuel to the petrol station.
“If that’s been repeated across the country, then that is definitely something that the Commerce Commission should be having a look at, in my view.”
In the Coromandel town of Thames, locals have said they are fed up with petrol prices being disproportionately higher than nearby areas.
There are three petrol stations in Thames and the prices for all of them are between $2.91 and $2.96 for 91, which is about 20-30 cents more expensive than nearby Ngatea and Tairua, which is on the other side of the peninsula.
Locals told Checkpoint they felt like they were being ripped off, and that feeling was prevalent across New Zealand, with many people in different towns saying they travel to other locations to get cheaper petrol.
Russell in Taumarunui said 91 octane fuel cost $2.95 there, while it was much cheaper in nearby Te Kūiti.
“Probably about $2.60 there, and we’ve just been fleeced, really, by fuel companies in Taumarunui. People complain about it all the time on our local Facebook page,” he said.
John, who lives in central Hawke’s Bay, said he made the most of a recent trip to Hastings, where he filled up for 45-50 cents a litre cheaper than at home.
“I made provision to carry fuel back in plastic containers,” he said.
He said he brought back 100 litres and filled up his car while he was there. “I think I’ll have enough for about three months.”
Bernard, who lives in Christchurch and recently drove to Auckland to visit some friends, said he was surprised to find small towns in the central North Island offered some of the cheapest fuel.
“Especially with the fuel tax in Auckland dropping down, I thought I would see some bargain prices up there, but no, the small town between Taupō and Tūrangi beats the big city prices. Very surprising,” he said.
Duffy told Checkpoint that Consumer NZ was concerned about the fuel prices in Thames and petrol companies operating there were at risk of losing their social licence.
“This is bad for Thames. People are driving out of Thames to neighbouring towns to to buy fuel, but it won’t just be the fuel companies that are missing out on customers in Thames, it’ll be the other businesses, where those customers head off and perhaps do their shopping in another town, rather than sticking around in Thames.
“It’s really bad for the broader Thames economy to see this kind of price gouging,” he said.
Duffy said there had been some Commerce Commission investigations into “price following”, where the fuel companies monitor each other’s prices.
“As soon as one puts their price up or down, the others tend to follow. They’re not necessarily talking to each other about doing it, but it is a practice that occurs,” he said.
He said for it to reach the threshold that made it anti-competitive, there needed to be an understanding between competitors that if one moved the price, the other would do it.
“It gets really close, however, and it’s particularly frustrating for consumers when they see this happening because in some instances, like in Thames, it can be very difficult for consumers to understand the reasons why it’s happening,” he said.
Duffy said the problem could be widespread, but the example in Thames was the worst he had seen.
“It is not illegal for a retailer of whatever product to set a price at whatever they think the market will bear,” he said.
Duffy said if there was a clear pattern where Thames was 30 cents higher than Ngātea, which was further away from the source of fuel with higher transport costs, the Commerce Commission should investigate.
“Is there any indication that those petrol stations in Thames are actually co-ordinating to keep that cost high? Because if there’s any hint that they’re doing that, the Commerce Commission needs to come down like a tonne of bricks,” he said.
He said the situation was tricky for people. “You can drive to another town to buy cheaper fuel, but you might burn your savings in the fuel that you use to get to that other town so it can be a bit of a false economy.”
The best thing people could do, he said, was to continue to alert the commission about the issue, and how it may be “skirting the edges of what could be anti-competitive behaviour given the uniform nature of the high prices across petrol stations Thames”.
“That may convince the ComCom that it needs to pick up an investigation here.”