Clancy Yeates
May 4, 2012
The Age
THE competition watchdog is launching a formal investigation into price signalling among petrol stations, amid concerns the practice could be ripping off motorists.
It is understood the Australian Competition and Consumer Commission’s probe will focus on the website Informed Sources, which allows petrol stations to share up-to-date information about their price changes.
With bowser prices near record highs, the watchdog last night said it was concerned petrol retailers were hurting competition by signalling their price intentions to competitors, waiting for a response, and reacting accordingly.
It said such sharing information could lower competition – which would keep prices unnecessarily high.
The tendency of petrol prices to move in lockstep has been a persistent bugbear of consumer groups.
Despite previous reviews into fuel prices, competition experts have long argued the industry has a problem with ”price signalling” – where businesses communicate their pricing plans in a way that is uncompetitive.
”The ACCC has put the industry on notice for some time about its concerns in this area,” an ACCC commissioner, Joe Dimasi, said.
The probe comes after a recent surge in oil prices pushed the average cost of petrol to 151.6¢ a litre last week, its highest level in 3½ years.
The federal government last year introduced a ban on ”price signalling”, but this only applies to banks, and was designed to stop lenders communicating their plans on interest rates.
This decision came despite the previous ACCC chairman Graeme Samuel saying the problem affected other industries and the ban should apply more widely.
Mr Samuel last week said it was ”a bit unfortunate” the government had chosen to focus on the banks, because the watchdog’s inquiry into petrol prices in 2007 had found that price signalling was ”all about petrol”.
”The ACCC believed back then that the law was deficient in relation to dealing with what were effectively collusive arrangements between competitors, otherwise known as cartels,” Mr Samuel said on The Conversation website.
A competition law expert at the University of NSW, Frank Zumbo, said the investigation was ”long overdue”.
”The underlying concern has always been that the sharing of information has an impact on price over a period of time. The question is to quantify that price effect,” Associate Professor Zumbo said.
A spokesman for Informed Sources said the company welcomed the investigation.
”We’ve been involved in investigations by the ACCC in the past and we’ve been nothing but helpful, and are more than happy to help them,” the spokesman said.
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