Market study into retail fuel
On 27 February 2020, the Government announced its decision to introduce changes to improve competition in the retail fuel market. The Fuel Industry Act 2020 was passed in August as a first step to implementing these changes.
The changes include:
- a requirement for fuel suppliers to publicise the wholesale prices of fuel at storage terminals to achieve a more transparent pricing regime
- rules to ensure contracts between wholesale fuel suppliers and their customers are fair and support competition
- providing a dispute resolution scheme for the new wholesale pricing regime and wholesale contract rules
- improvements to the monitoring of the fuel market by requiring fuel companies to collect and disclose certain information
- requirements to display information on the price of fuel at petrol stations including displaying premium fuel prices on forecourt price boards.
This follows a discussion document, released in March 2020, which sought feedback on the content of regulations under a Fuel Industry Bill and other matters.
Now that the legislation has passed, regulations are being developed in light of submissions to implement the Fuel Industry Act changes.
- Fuel Industry Bill: Further policy decisions and approval for introduction [PDF 194KB]
- Fuel Industry Bill: Further policy decisions and approval for introduction – Minute of Decision [PDF 248KB]
- Annex to Regulatory Impact Statement: Government response to Commerce Commission retail fuel sector market study [PDF 321KB]
- Response to the Commerce Commission’s retail fuel market study: Fuel industry bill [PDF 358KB]
- Response to the Commerce Commission’s Retail Fuel Market Study: Proposed Fuel Industry Bill: Minute of Decision [PDF 241KB]
- Regulatory Impact Statement – Fuel Industry Bill [PDF 949KB]
- Response to Commerce Commission’s Retail Fuel Market Study [PDF 246KB]
- Response to Commerce Commission’s Retail Fuel Market Study: Minute of Decision [PDF 209KB]
- Regulatory Impact Statement – Government Response to Commerce Commission’s Retail Fuel Sector Market Study – High Level Decisions [PDF 876KB]
2019 Ministers’ letters to fuel companies
On 5 December 2019, the Minister of Commerce and Consumer Affairs, Hon Kris Faafoi, wrote to each of the fuel companies encouraging them to start displaying premium petrol prices on price boards at their retail sites, ahead of new regulations requiring them to do so. This letter was sent to McFall Fuel, South Fuels, McKeown Group, Challenge Dealer Group, RD Petroleum, NPD Ltd, Waitomo Group, Allied Petroleum, Gasoline Alley, Gull NZ, BP, Mobil, and Z Energy.
On 16 December 2019, the Minister of Energy and Resources, Hon Megan Woods, wrote to BP, Mobil and Z Energy (‘the majors’) seeking their commitment to address the four recommendations in the final Retail Fuel Market Study Report directed at the majors and asking for a progress update by 30 March 2020.
Commerce Commission final report
On 5 December 2019, the Commerce Commission released its final Retail Fuel Market Study Report.
The Minister of Commerce and Consumer Affairs selected the retail fuel market as the subject of the first Commerce Commission market study on 3 December 2018. The Minister considered it was in the public interest to require a study into this market, given factors such as:
- the more than doubling of petrol and diesel importer margins over the past decade which could not be explained by any significant increase in capital expenditure
- the size of the market (around 6 billion litres of petrol and diesel are consumed for land transport use annually)
- the inability of previous studies to definitively conclude whether or not there is a competition problem in the market
The Commerce Commission has made a number of recommendations aimed at improving competition in the New Zealand retail fuel sector.