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PM Ardern says BP pricing reinforces need for ComCom market studies

Monday 30th April 2018

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Prime Minister Jacinda Ardern wants to hear BP New Zealand Holdings' explanation about plans to raise prices in several provincial areas to protect sales in another but says the tactics underpin the need for greater investigative powers by the Commerce Commission. 

An internal BP New Zealand emailed leaked to Stuff showed the local subsidiary of global oil giant BP would raise petrol prices in Paraparaumu, Kapiti and Levin in the hope its competitors would match those prices, and reduce the price gap in Otaki where the company was losing volume. Ardern told her weekly post-Cabinet press conference the decision "certainly raised eyebrows with our ministers (Megan Woods), which is why she called them in for a meeting". 

"On the face of it, they may not be in breach of the existing legislative framework, but Kiwis will rightly be saying this doesn't feel fair," Ardern said. "First we'll seek an explanation then we'll consider our options around that." 

Petrol prices were put under scrutiny last year by the previous administration, and a Ministry for Business, Innovation and Employment inquiry found the fuel market may not be competitive, although the regulator couldn't be definitive in that conclusion. Under the new government, the commission is set to get greater investigative powers to trigger formal market studies, where it can compel companies to provide information, something Commerce Minister Kris Faafoi wants in place by the end of the year.

The bill has started its first reading and is third on the provisional order paper meaning it's likely to be sent to select committee tomorrow when Parliament is sitting. 

"We've already seen a need to allow the Commerce Commission to be able to conduct market studies - that's something we had already anticipated needing to change the law over," Ardern said. "It adds greater impetus as to why would want to undertake that work." 

The clamour over fuel pricing came the same day Auckland Council voted 15-2 in favour of a regional fuel tax to partially fund the city's transport needs over the coming decade. 

When asked what the government could do to prevent the oil companies from equalising the Auckland fuel tax across the country, Ardern said giving the Commerce Commission the market studies power would provide comprehensive details about how the firms operate nationwide. 


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