Commission ramps up scrutiny on fuel companies amid market pressures

Commissioner Bryan Chapple says more frequent reporting will be used to call out any pricing behaviours that give the Commission cause for concern, both publicly and directly with fuel companies.
 
“Public scrutiny is a powerful tool and we will use it. Nobody wants to see fuel companies using the situation in the Middle East as an excuse to unjustifiably increase prices at the pump. Any retail price increases should be aligned with actual increases in the cost of sourcing fuel. I have communicated that message directly with fuel companies.”
 
The Commission does not set fuel prices and does not have powers to control them. Its role is to monitor, report and hold companies to account through transparency and scrutiny. It is also the Commission’s job to ensure the sector remains competitive and that representations around pricing (including reasons behind any changes) are fair and accurate.
 
The reports, available on the Commission’s website, will provide updates on retail fuel price movements and compare them with changes in the cost of importing fuel.  
 
“We want consumers to feel confident that petrol price increases are justified and that decreases in global costs are passed through to retail prices as quickly as the increases have been,” says Mr Chapple.
 
Mr Chapple also encourages Kiwis to shop around, using tools like the Gaspy app to compare prices. Gaspy lets motorists check the lowest fuel prices in their area without having to drive around to find a better deal.

First snapshot released

Mr Chapple says the initial aggregate analysis raises no concerns.
 
“The gap between rising international costs and slower retail movements aligns with patterns seen during previous global shocks but it is not a licence for fuel companies to increase prices excessively.”
 
The Commission will also be looking at variations in regional pricing, and will continue to monitor price movements, identifying and calling out any pricing behaviour that appears unjustified.

Fuel surcharge reminder

Alongside monitoring, the Commission is reminding businesses to be transparent and honest about reasons behind any price changes. 
 
Mr Chapple says placing a fuel surcharge on a product or a service is legal so long as the business is transparent and upfront about the surcharge and what it’s for. 
 
“We expect businesses to do the right thing, and they must be honest about the reasons for any price increase.
 
“We encourage anyone who believes a business has been misleading about the reason for a price increase to report it via the ‘raise a concern’ function on our website,” says Mr Chapple.

Background

The Commission has previously used its monitoring role effectively in regions such as Thames and Waiheke, where transparency and public scrutiny contributed to greater competition on pump prices for consumers.
 
The Fuel Industry Act 2020 sets up a regulatory regime for fuel with the purpose of promoting competition in engine fuel markets for the long-term benefit of consumers.
 
The Commission does not set fuel prices and does not have regulatory powers to control them. High prices and price increases in and of themselves are not illegal under the Fair Trading Act. However, the law prohibits misleading and deceptive conduct, and false representations. Where we have concerns about potential non-compliance, we may investigate. If we consider a breach has likely occurred, we will apply our Enforcement Criteria to select from a range of enforcement responses. One possible response is to seek fines against industry participants in the courts.