If retail petrol prices across Canberra don't fall to under $1 a litre by the end of the week, the ACT government will use its powers under the Fair Trading Act to intervene and cap prices.
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Chief Minister Andrew Barr will use the legislation against fuel retailers in Canberra whom he says are profiteering by taking advantage of the historically low international fuel prices, although it is not known how the new price regime would be enforced.
The global coronavirus pandemic has led to an international over-supply of oil, with bowser prices in most capital cities across Australia's eastern seaboard now plunging to their lowest in more than 20 years.
"I'm reliably informed that the wholesale price of petrol is now around 80 cents a litre; it should be able to be sold in Canberra for $1 a litre or less no matter what the cirumstances of the retail outlet," Mr Barr said on Tuesday.
"Many [Canberra fuel retailers] are selling around 90 cents a litre but some are still around 40 cents a litre above the wholesale price.
"Now that is a retail margin that is unacceptable and demands government intervention."
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He said that he was "having the work done now" which will allow legislative enforcement to occur.
"If I don't see the prices fall to below a $1 per litre by the end of the week, then we will put that [enforcement] in place," he added.
On Tuesday, the Caltex terminal gate price in Sydney was set at 89.09 cents per litre for 91 RON standard unleaded fuel, and 100.95 cents per litre for premium unleaded.
Alternative retailers in Canberra such as Costco and Metro use their own direct supply chains from South-East Asia, which allow them to sell fuel at or below the Caltex wholesale price.
Inflated petrol prices in Canberra have been a thorny issue for the ACT government which last year conducted a bipartisan Legislative Assembly inquiry into ways of delivering sharper prices for Canberra motorists.
Mr Barr's latest edict and timeline is certain to spark a strong response from fuel retailers, who claim they are being squeezed by exorbitant ACT government rates and pay a minimum of four cents per litre to have fuel transported from Sydney to Canberra before they can even begin to recover their costs.
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