Terry Collins: AA principal policy advisor on the Commerce Commission issuing warning to fuel companies over prices

The Commerce Commission says the delay in companies dropping the cost of petrol when company costs fall is costing Kiwi motorists $15 million a year.

It's warning fuel companies it'll be watching prices when Auckland's regional fuel tax kicks in next month.

AA principal policy advisor Terry Collins says petrol companies will be acting quickly come July to avoid further criticism.

"I've been talking to contacts within the industry, and they're very keen to ensure that the Auckland motorists get their full 11.5 cents - one of the large majors has got a big team who are trying to get it done by midnight."

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Episode Transcript

Speaker 1 (00:00):
The Commu's Commission has taken a crack at fuel companies
for rushing to put the price of petrol up, but
then dawdling when they bring it back down. ComCom reckons
the fuel companies are costing US motorists fifteen million bucks
a year by delaying the drops in the petrol prices.
Terry Collins is the AA Principal policy advisor and joins me. Now, Hi, Terry, Afternoon, Heather.
So they call this thing rockets and feathers, where the

(00:21):
price rockets up but then feathers down. Is that what
you're seeing?

Speaker 2 (00:24):
Yeah, well, I don't know if we've seen it or not.
They've reported on it where they can't explain why it's happening.
What I find interesting is that back when they did
the market survey in two nineteen, this condition, which is
quite common overseas, didn't exist. Now they have a new
way of modeling and have found this rocket and feathers
effect occurring. Well, I find that interesting is because usually

(00:47):
that occurs in a market where there's not a lot
of information around pricing. But since the first survey, we've
now got all our grades of fuel or advertising outside
the service station. We've got these fuel laps, We've got everything.
So what should have improved the information consumers as seemed
to have an effect that it shouldn't have had, and
I can't explain it and they can't explain it.

Speaker 1 (01:08):
Are the petrol companies actually obligated? I mean, what's going
on right is that the price of oil goes up,
so they put the price of petrol up. The price
of oil comes down, so they slowly put the price petrol.
Now are they obligated to do it quickly? Can you
know they're a business? Can they do it when they
want to?

Speaker 2 (01:21):
Yeah? Well, sometimes due to competition they take a bit
of a haircut, no, and other times they've got to
make up for it. It's a long term game for
them over the year, with fluctuations within it. I sometimes
explain to people, Okay, that tank of fuel in the
service station there, that was bought over a month ago.
I've got ship processed and done whatever, and now they've
got to sell it. Well, if the price goes down,

(01:42):
I've still got to They paid a high price for it,
so they've got to somehow get their money back. If
the price goes up, they go, oh, I can't brought
that the cheap posts, but my next tank's got to
be more expensive, so maybe I just try to get
as much as I can, knowing I've got to pay more.
I don't know how much of that exists within the market,
but I would really love explanation from a comcoms to
what's causing the suffite.

Speaker 1 (02:03):
The Commics Commission says that kind of warned the fuel
companies right. They say that they're going to be watching
when the Auckland Regional fuel tax comes out, which I
think is it this month or next month, I can't remember,
but anyway, end of this month, end of this month,
are the people company is going to care?

Speaker 2 (02:17):
Yeah? They are. I mean this is a crescent shot
across the bail by the Commist Commission. But I'll be
talking to context within the industry and they're very keen
because of the optics on it, not least by the
media and by the Commuts Commission, to ensure that the
Auckland motorists get their full eleven and a half cents
discount or rebate the increasing price come one July. I

(02:40):
know one of the large major's got a big team
working on it, trying to get it down by midnal
it on Matt David. It comes into effect across all
these stations.

Speaker 1 (02:47):
Now, that's what I want to hear. Terry, love my dollars.
Thank you very much. Terry Collins, AA Principal Policy Advisor.
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