May/June - MTA

MTA presents case to Senate Inquiry
(L-R): Senate Select Committee into Fuel and Energy Chairman, Hon. Mathias Corman, SA Senator Hon. Anne McEwen, MTA Executive Director
John Chapman, Senator Hon. David Busby from Tasmania and Independent SA Senator Hon. Nick Xenophon.
The MTA’s Executive
Director, John Chapman,
tabled industry concerns to the
Senate Select Committee on
Fuel and Energy in March.
His presentation centred on
issues affecting small and
independent fuel retailers,
commission agents and
members who have fuel retail
operations connected to their
business.
Mr Chapman outlined the
MTA’s concerns and the
following is an excerpt of his
presentation.
Mr Chapman outlined “issues
threatening the viable and
profitable operations of
members whose very existence
is endangered in a market in
which regulatory arrangements
favour large retailers and big
oil companies, enabling their
domination and manipulation
of the market.
“The first concern is the need
for adequate arrangements for
access to oil company
terminals for all buyers at a
competitive wholesale price.
The current regulatory
arrangements do not provide
for that,” he said.
“The wholesale market for
petroleum products in
Australia is dominated by the
four major oil companies,
Caltex, BP, Shell and Mobil,
with independent imports only
accounting for a small
proportion of the market. As a
result there is very little
competition in the wholesale
market and the market is
defined by the lack of
transparency in determining
the wholesale process of
petroleum products.
“The government must
recognise that, due to this lack
of transparency, fuel retailers
invariably become price takers
and are unable to contest
the price either at the
terminal or on delivery to their
service station.
“MTA believes that this lack
of cooperation and
transparency in wholesale
pricing is not in the best
interests of motorists or
fuel retailers and service
station operators.
“MTA believes that the
introduction of true terminal
gate pricing arrangements
where costs incurred after the
terminal gate are itemised and
charged separately, and where
access to terminals to purchase
“MTA strongly argues
against the introduction of
any mechanism which
will reduce competition
and result in a decrease
of consumer benefits”
fuel at the terminal gate is
available to all suitably
qualified buyers, would
significantly increase the level
of competition and the degree
of price transparency in the
wholesale market.
“The second concern is that
both the wholesale and
retail petroleum markets are
highly concentrated.
“This concentration has led
to a loss of diversity, a loss of
competition and a loss of
choice for consumers.
“The MTA strongly argues
against the introduction of any
mechanism which will reduce
competition and result in a
decrease of consumer benefits
and believes the development
of consumer policy within this
and any other market should
be based upon the principle
that diversity and competition
provide consumers with the
best benefits.
“The ability of independent
operators to compete against
oil company and supermarket
sites is restricted because of
the inherent unfairness in
terms of competition and costs
and the potential of misuse of
market power of the existing
market, the removal of the
sites and franchising acts and
the failure of the existing Oil
Code and TPA provisions to
reinstate the protections
previously provided by these
repealed acts.”
The Committee is focussing
on matters associated with fuel
and energy, including the
price of fuel, regulation and
taxation arrangements and
alternative fuels.
www.mta-sa.asn.aumotor trade 9