ACAPMA CEO Mark McKenzie has hit out at “periodic public and political bashings of the service-station industry in Australia”.
“As one federal politician put it to me 18 months ago, no politician ever lost votes by attacking the Australian fuel industry,” he said. “We’re not likely to be able to change this longstanding public perception of our industry any time soon.”
Using a Star Wars analogy, Mr McKenzie said most Australians perceived that politicians and media commentators must use ‘the force’ to counter the apparently unbridled power of the ‘dark side’ – the Australian fuel industry.
He added that this perception continued to exist despite more than 10 years of authoritative research completed by the Australian Competition and Consumer Commission that had consistently given the industry a positive report card.
“The problem is that none of the politicians or public-policy-makers appears to be reading the ACCC’s comprehensive reports,” Mr McKenzie said.
In recent years, he added, a disturbing trend had emerged with respect to government policy-making relating to retail fuel operations in Australia’s states and territories. This involved state and territory governments introducing new laws that were effectively increasing the costs of retailing fuel in most Australian jurisdictions – costs that, in the end, must be passed onto motorists in the form of higher fuel prices.
“These new laws have come in quick succession in recent years and, when considered in aggregate, are putting significant upward pressure on fuel prices and provide at least a part explanation for the variance that often occurs between capital-city fuel prices,” Mr McKenzie said.
In the past two years alone, he added, the following laws had, or soon would, come into effect for fuel retailers:
• Stage-two vapour-recovery laws for fuel retailers in NSW.
• Expanded biofuel laws for fuel retailers in NSW.
• UPSS monitoring laws in NSW.
• New biofuel laws in Queensland.
• New compulsory fuel-price reporting laws in NSW and the Northern Territory.
• New price-board regulations in Victoria, Tasmania, Queensland and the NT.
Regardless of their merits, the clear majority of these laws not only involved a capital hit for fuel retailers, but also imposed increased recurrent costs in the form of compliance management and maintenance costs, Mr McKenzie said.
“When it comes to introducing laws that increase the costs of fuel retailing – costs that must ultimately be passed onto motorists in the form of higher fuel prices – NSW is the clear leader,” he said.
“In fact, a recent ACCC investigation estimated that the NSW biofuels mandate was costing NSW motorists an extra $83 million a year in fuel costs.
“We, as an industry, accept that fuel-price transparency is necessary to provide the Australian community with some comfort that competition is alive and well in our market.
“But when it comes to governments being transparent about the cumulative impact of increasing regulation on fuel prices, there appears to be a distinct lack of transparency and public reporting.
“But the government hypocrisy doesn’t stop there.
“There are two principal areas where Australian governments have long had an opportunity to advance initiatives that could simultaneously lower the costs of retailing fuel in Australia – but have consistently chosen to ignore them.
“The first relates to the growing problem of fuel theft (ie, drive-offs) where there is an urgent need for more effective laws to deter people from deliberately driving away without paying for the fuel.
“This problem has become very significant in Victoria and WA, where the annual costs of fuel theft vary between $5,000 and $11,000 a year – losses that come straight off the bottom line.
“To add insult to injury, there is currently no mechanism for fuel retailers to recover federal fuel taxes (ie, excise) from fuel that is stolen – so government taxes are protected and the loss is compounded for fuel retailers.
The other area relates to the increased cost and complexity of constructing new retail sites and refurbishing existing sites.
“State/territory governments have progressively tinkered with relevant planning laws that have significantly increased the cost of service station works in Australia.
“To make it worse, local governments don’t interpret these laws consistently, which increases the cost of securing necessary approvals for service station works.
“Perhaps it’s time for Australian governments to stop and consider whether the policy approach being pursued in respect of our industry makes sense, because, at the moment, the dramatic increase in costs associated with ever-increasing state/territory legislation is working contrary to their stated aims of keeping fuel prices as low as possible for all Australians.”
In the meantime, ACAPMA is lobbying hard for changes to be made that provide a more effective deterrent to fuel theft (including new mechanisms to secure refunds of associated excise) and to streamline authority approvals for service-station works.
This is an edited version of an article originally circulated by ACAPMA on April 28, 2017.
