Oil Industry Responds to Senate Committee Recommendations for Reform of Industry Regulation

The Australian Institute of Petroleum is disappointed that the Opposition and the Australian Democrats are not yet prepared to support much needed reform of the framework of regulation governing petroleum retail marketing.

The lack of agreement in the report of the Senate Rural and Regional Affairs and Transport Legislation Committee on the proposal for repeal of the complex and outdated Petroleum Retail Marketing Franchise and Sites Acts will mean further delay in implementing this key element of the Government’s petroleum retail sector reform package.

Jim Starkey, Executive Director of the Australian Institute of Petroleum, said "the continuing delay is not in anyone’s interest. The current legislative framework benefits no one in the industry or the wider community, and is inhibiting the essential restructuring of the industry. The Government’s reform package will ensure that all parts of the industry operate under the same conditions, and allow the industry to restructure to a sustainable basis. The new Oilcode will be a major advance for retailers, and the review proposed before final repeal of the Sites Act provides a further safeguard."

The restructuring of the retail sector of the industry will allow the oil companies to achieve greater efficiencies and increase competitive pressures in the market. Australia already has pre-tax petrol prices amongst the lowest in the developed world. Industry restructuring will help to maintain this position, and to reduce the gap between city and country prices. The ultimate beneficiary will be the consumer.

Jim Starkey stressed the urgent need for the reform package to be implemented as soon as possible. "At present, all parts of the industry are under great pressure. The current structure of the industry cannot be sustained. We must move now if we are to avoid closures of service stations that could otherwise be viable, and to capture the benefits for the consumer. AIP and its member companies will continue to work with Government and other parties in the industry to put the reform package in place."