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24 Jan 2018 14:25
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  •   Home > News > Business

    Drivers paying too much at pump: report

    New Zealanders are getting stung at the pump and now the government wants to give the Commerce Commission the powers to investigate.

    The government is looking to give the Commerce Commission powers to investigate massive fuel price hikes that are hitting those further south the hardest.

    The Fuel Market Financial Performance Study released on Wednesday found retail petrol prices in New Zealand have increased by 13 cents per litre over the last four years with significantly bigger increases in Wellington and the South Island.

    Minister of Energy and Resources Megan Woods says the study shows that over the past nine years New Zealand has gone from having some of the lowest pre-tax fuel prices in the OECD to the highest.

    "I'm not prepared to stand by and watch the wealth transfer of hundreds of millions of dollars from New Zealanders to the fuel companies and do nothing," she said.

    The Minister has asked MBIE to investigate further and legislation has been fast-tracked for the Commerce Commission to conduct investigations as well.

    The Minister of Commerce and Consumer Affairs Kris Faafoi says the legislation will be completed by 2018 which would enable the Commerce Commission to compel companies to disclose market information.

    The study concluded that an investigation by the Commerce Commission was the best course of action, over no government action or regulatory interventions.

    MBIE agreed with the study's recommendation to hold an investigation and that the significant costs involved were still outweighed by the hundreds of millions of dollars consumers were losing.

    Fuel company submissions on the report have defended their prices.

    Both Mobil and BP said they believe New Zealand is a competitive market with BP adding there were no barriers to competitors wishing to invest.

    Z Energy went further by saying it could clearly demonstrate its returns are fair and reasonable against international and domestic peer benchmarks.

    MBIE's margin monitoring and OECD benchmarking data was described by Z Energy as "at times unreliable and misleading".

    Gull said it has evaluated the option of building a South Island terminal several times in the past 10 years, but the value proposition wasn't as good in the South Island and they would need to recover costs from motorists.

    © 2018 NZN, NZCity

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