Canberra has a disproportionate number of outlets selling the most expensive petrol in Australia, driving prices up in the capital.
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But Coles - the outlet responsible - is not breaking any laws by charging excessive prices, says the chairman of the Australian Competition and Consumer Commission, Rod Sims.
“Canberrans are paying too much for petrol, there's no doubt about that,” he said.
“One of the key reasons for that is that Canberra has a very unusually high number of service stations owned by Coles - over 26 per cent. Coles is by far the highest-pricing service station round the country.”
Meanwhile, the capital’s cheapest petrol outlet, Costco, is hoping to open more petrol pumps, and is now focused on improving its payment technology to ease the growing queues at its single Canberra outlet.
In a one-line response on Monday, a Costco spokesman confirmed it would “like to add more pumps in the future".
“To improve service and quicker filling times, we are introducing faster software for Tap-and-Go transactions,” he said.
Mr Sims welcomed the announcement from the ACT government on Sunday that it would commission an inquiry into why drivers are consistently being charged more for fuel in Canberra.
ACT chief minister Andrew Barr was critical of the ACCC, saying he had asked the commission to use its investigative powers to “undertake a deep dive analysis” of why the petrol market was failing in Canberra.
But Mr Sims said the ACCC, while it would contribute to the inquiry in any way it could, would not be undertaking its own investigation into Canberra.
He said it had recently completed four investigations into regional cities, and had a good understanding of the reasons behind discrepancies in fuel prices.
“We've got a pretty good understanding of why prices in some areas are the size they are, and I think we understand why Canberra prices are as high as they are,” he said.
“Now our regional studies have now stopped … and it's really as much a resourcing question, but I think the bigger issue is, what would it achieve?
“We feel we sort of know the answers, and we're happy to provide all that to the inquiry, we'll cooperate fully with whatever information we can provide and whatever perspectives.
“I think trying to put some local pressure on is really the best way to deal with this as a first step.”
He said thanks to the presence of Costco, Canberra also had the widest price range of any city in the country, but there was enough of range between the highest and lowest priced to be able to send a message through consumption.
“There are many places where there's quite a difference in the price of fuel, and I think if people do keep some eye on that and just buy from the cheaper one of the two or three you've got to choose from on the way home, that starts to send signals,” he said.
“I realise it's a long-term play, but I think it's helpful.
“The companies need volume as well as high prices. Take the volume off, it can affect the prices they pay [charge].”
He said there was no single explanation for the fact that many small towns around Canberra, such as Gunning, Sutton and Gundaroo, had cheaper prices with little no competition.
“It was that question that got us to look at many of those regional centres, where you had the same sort of anomalies, and I guess the issue goes down to the motivation of the petrol companies to come extent, or the companies in those towns,” he said.
“Sometimes they're part of the community, they feel part of the community, they want you to come in and buy the milk and the cigarettes and other things as well, so there's more to pricing.”
But he reiterated that Canberra’s main problem was the number of Coles outlets throughout the city, an issue that could possibly be addressed by zoning laws favouring independent outlets in more areas.
Mr Barr said he hoped the inquiry would put pressure on retailers to justify their pricing strategies.
"If there are issues that are identified that are within the control of the ACT government, and there may be some, the obvious one will be in relation to the number of petrol station sites that could be released in the future and their location, where we have influence on that, noting again that in this jurisdiction we don't tend to have petrol stations on major roads," he said.
The Canberra Liberals also welcomed what it called Mr Barr's "newfound interest" in trying to reduce petrol prices in Canberra.
"The ACT has got limited powers when it comes to controlling fuel prices, but there are certainly some things that we can," opposition leader Alistair Coe said.
He said he hoped the Chief Minister would consider 24-hour caps on petrol pricing, and real-time publishing of prices, so that consumers would know where to get the best deal.
