ACCC authorises 6-month cooperation period

    The ACCC grants authorisation to the Australian Institute of Petroleum (AIP), and major oil refiners to continue cooperating on measures to improve the security of fuel supplies.

    Unpredictable change can occur due to the Covid-19 pandemic, altering the demand for fuel.

    “We believe that allowing fuel companies to coordinate fuel delivery, processing and storage if there is a critical supply disruption as a result of the pandemic, will support the fuel sector to ensure the supply of fuel products in Australia is secure and reliable, and reduce the risk of shortages,” says ACCC Commissioner, Stephen Ridgeway.

    “While we acknowledge there are some risks that the conduct may reduce competition, the limited scope and duration of the authorisation, and the reporting conditions mean the risk is low.

    “Overall, the benefits of allowing parties to work together to secure the supply of fuel products to Australian businesses and consumers outweigh any potential detriments,” says Mr Ridgeway.

    The conduct has been authorised for six months, rather than the twelve months sought by the applicants, as the ACCC is not convinced that the longer period is required for authorisation.

    “We believe the shorter period of authorisation is appropriate to deal with the impacts of the pandemic and will minimise the risk of longer-term impact on the fuel markets,” explains Mr Ridgeway.

    Who does it apply to?

    The authorisation applies to AIP (the industry’s peak body), its members (BP Australia, Caltex Australia, Mobil Oil Australia and Viva Energy Australia) and any future parties wishing to participate in the conduct, which must first be approved by the ACCC.

    The authorisation will come into force on 2 October 2020, if no application for review of the determination is made to the Australian Competition Tribunal.

    For more information, click here.

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