Productivity Commission to assess best fuel pricing option for South Australia

The State Government has asked the Productivity Commission to investigate various policy models regarding the transparency of fuel prices across the State.

The review will look at the best way consumers can make informed choices when purchasing fuel and will include investigation of the Western Australian model, which has a 24 hour fuel price freeze currently in place.

Attorney-General, Vickie Chapman, said the price of fuel had become increasingly unpredictable, making it difficult for many families to plan ahead. 

“Filling up the car is one of those chores that has become increasingly more expensive, with petrol prices fluctuating dramatically,” she said.

“It is clear, however, even in the absence of regulatory intervention, Adelaide remains the cheapest mainland capital city for fuel.

“The problem I have been dealing with for the last 12 months however is determining the effectiveness of regulatory options with respect to its impact on prices, and in enabling consumers to take advantage of lower prices, in the face of conflicting evidence.

“While Consumer and Business Services has undertaken an analysis of the various policy models, the Productivity Commission’s specific economic and competition policy expertise will enable conclusions to be drawn about the various options for reform and their impacts on the market and for consumers.

“To date, the information from other jurisdictions has been decidedly mixed. In a report published on 5 December, the New Zealand Commerce Commission found there was ‘no strong case’ for the introduction of mandatory disclosure schemes.

“While some states have pursued this and implemented real-time fuel pricing apps and websites, the costs can be prohibitive and require significant cooperation and self-reporting from retailers.

“There has been evidence to suggest such schemes inadvertently increase prices. Recent media regarding cost savings for motorists from the Queensland trial ignore the latest ACCC report, which state a 12% increase in the number of fuel retailers in the Brisbane area to be a factor.”

“Ultimately, we want to ensure consumers have greater certainty about when to purchase their fuel, and implement a policy measure that is of benefit to all South Australians; not just a handful who regularly check a Government app.” 

I look forward to reporting back to South Australians in the New Year with the Productivity Commission’s findings and how the Government will respond to them.