Government propose national fuel-watch program
The federal Government announced its decision to extend the WA scheme nationally, and the only saving grace is that it won’t be introduced until year’s end because, frankly, the scheme is a nonsense with only political benefits.
The Government wants to be seen as doing something about petrol prices, so it unveiled a petrol price commissioner for the ACCC, which is also an anathema, given the ACCC is meant to look after economy-wide benefits, and now the fuel-watch program, which actually stops retailers dropping prices.
The idea of the scheme is retail prices are posted on the internet and not allowed to be touched for 24 hours.
This means that if a retailer finds out the guy next door has lower prices, he can’t change them, and as 70 per cent of a service station’s gross profits are from the convenience store, this can be a disaster.
The first change the Government should make is to allow retailers to lower prices while maintaining the ban on increasing prices.
Intuitively, the concept of price-limits on anything and consumer benefits is hard to imagine, and so it goes with petrol in Western Australia, where, according to some independent monitors like Informed Sources, prices are 1-1.5 cents higher than in the rest of Australia.
In its report last year, with some qualifications, the ACCC said prices were lower on average.
Then again, you would expect Perth to pay less for petrol than the rest of Australia, given its proximity to Singapore, which is the source of imported fuel.
The entire petrol-monitoring process is simply a rehash of its election commitments, with zero independent analytical backing.
Last year’ ACCC report was decidedly neutral as far as pricing policies were concerned, and it would take a huge leap in logic to use it as the basis of any change in policy.
Maybe it would be better if the Government learned the facts, and then worked out if any changes would actually help.
Source: news.com.au
Tags: australia, fuel costs, government, WOOLWORTHS