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More sites for independent petrol stations in ACT 'risky', says Chief Minister Andrew Barr

The ACT government will consider making more sites available to independent petrol station owners to maintain pressure on major supermarket chains and help lower fuel prices in the territory.

Canberra's petrol price war continued on Thursday afternoon with prices at Costco in Majura Park dropping to 95.7¢ a litre, which led to congested traffic on Majura Road near Fairbairn Avenue. 

Many motorists at Costco said they travelled out of their way to capitalise on cheap fuel at Costco, with some travelling as far as Harrison and Mitchell and others leaving work early to beat the 5pm rush hour.

ACT Policing were called to the Costco store on Thursday afternoon as cars began to queue for petrol on surrounding roads, causing lengthy delays for motorists.

ACT Chief Minister Andrew Barr said: "The words 'fuel price war' are music to the ears of Canberra motorists who have paid too much for petrol for too long.

"The entry into the market of an aggressive competitor who's prepared to really take on the major players is a fantastic thing."


But Costco's business model didn't allow for the business to set up multiple petrol outlets throughout the ACT and other solutions were needed in the meantime, Mr Barr said.

He said the government would consider making more sites available to independent operators, though admitted such a move presented "a risk".

"Previous ACT governments have tried that and it's worked for a period of time but we haven't been able to guarantee the success of independents or that they won't sell to bigger players.

"While we can make more sites available for petrol stations, and we will, I can't guarantee who will operate them forever."

But NRMA ACT president Alan Evans said the government needed ensure the locations were not bought out by major chains by creating caveats on any land purchased.

"It's a good decision and something I've been calling on for years as it will surely bring prices down further," he said.

"The line of cars queuing at Majura Park shows the impact that independent sellers can have in the ACT. Just imagine if we had more in the north, west and south of Canberra."

Mr Barr discussed the authorisation of petrol station locations and operations when he met with the administrators of the ACT Fuel Watch Facebook page on Thursday.

He praised their ongoing publicity campaign for greater competition and cheaper petrol in the territory. 

"Consumers have power here and if they're willing to use it I think that will driver a longer-term change in the Canberra market."

The competition watchdog is set to have a closer look at price differences for petrol in regional centres like Canberra compared with other capital cities.

Australian Competition and Consumer Commission chairman Rod Sims said pricing anomalies in some regional centres seemed to arise where petrol price reductions had not followed the decrease in international prices as much as consumers would expect.

Mr Sims said the ACCC would produce at least eight reports in 2015 looking at petrol price movements and what drives them overall, and at least four market studies looking at "micro" issues in depth, including analysing the price drivers of petrol in three regional markets.

When comparing seven-day rolling average retail prices with the average price across the five largest cities (Sydney, Melbourne, Brisbane, Adelaide and Perth), the ACCC found an average difference in Canberra of 6.8¢ a litre over 2013-14.

In December last year, the difference was 19.3¢ a litre.

The National Roads and Motorists' Association welcomed the ACCC's decision to focus on the disparity between regional and capital city prices.

"Petrol prices have come down 40 cents per litre over the past six months in most capital cities," said NRMA president Kyle Loades.

"However, in most regional centres these prices have not fallen far enough and the gap between city and country prices has widened."

In December, Mr Barr wrote to the watchdog to ask that Canberra be included as there was "a very strong case" for the city's petrol market to be closely examined.

"In particular, the price disparity between Canberra and other capital cities has long been a source of frustration," he said.  

"It is disappointing that the price in Canberra is frequently higher than in other cities and the immediate areas surrounding the capital."