Petrol market reform will bring consumer benefits

The Australian Institute of Petroleum (AIP) welcomes the passage through the Australian Parliament of the Petroleum Retail Legislation Repeal Bill 2006.

The Executive Director of AIP, Dr John Tilley said, "AIP congratulates the Minister for Industry, Tourism and Resources, Ian Macfarlane for pursuing the difficult and lengthy process of downstream market reform."

"We also commend the Minister for the extensive consultations undertaken with all sections of the industry over the last three years."

"The reform package will bring benefits to the consumer by facilitating greater competition in the retail petrol market while providing greater protections to small business service station operators," said Dr Tilley.

The Australian Government's downstream market reform package includes the repeal of the Sites and Franchise Acts and the implementation of a mandatory Oilcode under the Trade Practices Act 1974.

"The Sites and Franchise Acts were found by many government inquiries to be anachronistic and outdated because of the significant changes to petrol retailing over the last two decades," said Dr Tilley.

"Repealing these Acts will allow all market participants to compete on an equal basis."

The Oilcode will also bring benefits for small business through:

• regulation of fuel re-selling agreements including improved tenure provisions for small business;
• a national terminal gate pricing (TGP) regime to improve pricing transparency;
• additional measures for price transparency in fuel sales documentation; and
• a low cost dispute resolution process.

"AIP will work cooperatively with the Australian Government to ensure the smooth implementation of the market reform package and contribute positively to the legislated review of the Oilcode provisions in 12 months."

AIP member companies play various roles in each segment of the fuel supply chain. They include the four major (refiner/marketer) oil companies who operate all of the petroleum refineries in Australia and handle a large proportion of the wholesale fuel market. AIP member companies directly operate and control only a relatively limited part of the retail market.

Media Contact:      
Dr John Tilley
Executive Director, AIP
(02) 6247 3044