Petrol lobby goes on defensive as Treasurer Jim Chalmers expresses concern about price spikes

Australia’s petroleum industry has suggested it is the nation’s most transparent in the face of potential new $100 million fines, as motorists pay record-high fuel prices and the flow-on effects threaten to worsen inflation.

The Australian Institute of Petroleum, which represents the likes of Ampol, BP, Mobil Oil Australia and Viva Energy, has gone on the defensive with crude oil prices climbing closer to $US100 a barrel again on Thursday.

“The fuel industry is more transparent to the customer in the street than any industry I can think of,” the group’s chief executive Malcolm Roberts told The Nightly.

“Obviously, AIP members don’t and won’t price gouge.”

Even before the latest crude oil spike flows through to the bowser, motorists in some parts of Brisbane are now paying $2.28 a litre for basic E10 unleaded, just a week after this fuel was selling for $2 a litre.

Diesel is now selling for $2.60 a litre in parts of Perth. It’s $3 a litre in parts of Outback South Australia and $3.20 a litre in remote parts of the Northern Territory.

Treasurer Jim Chalmers has expressed concern about skyrocketing fuel prices, a day after announcing new $100 million fines for proven cartel behaviour or deceptive conduct among petrol retailers.

The Australian Competition and Consumer Commission is also getting extra resources to monitor fuel prices.

“Well, we’re concerned about these price spikes, and that’s why we are taking the important and decisive action that we are taking to empower the ACCC to issue those bigger fines if they need to,” he told Sunrise’s Natalie Barr on Thursday.

“Your viewers should know, Nat, you know, I was speaking to the ACCC before dawn this morning.”

The AIP hit back, saying it published weekly updates on wholesale petrol prices.

“The industry is very experienced with a high level of public scrutiny and supports that transparency,” Mr Roberts said.

Soaring fuel prices are expected to add to already high inflation levels with ANZ on Thursday joining the Commonwealth Bank, NAB and Westpac in predicting a Reserve Bank of Australia rate hike on Tuesday next week, in addition to a predicted May increase.

A 25-basis point increase would take the RBA cash rate to 4.1 per cent on March 17 for the first time since May last year.

“The clearest and most immediate impact of the Middle East conflict on Australia is higher inflation,” ANZ economists Adam Boyton and Adelaide Timbrell said.

“We expect a 25 basis point rate hike from the RBA in its 16–17 March meeting, though the decision will not be as clear cut as February’s.”

Australian consumers are also facing a spike in food prices with farmers struggling to secure diesel from independent wholesalers who deliver fuel from the depot to the farmgate.

Inland Petroleum, an independent wholesaler based at Dubbo in western NSW, on Thursday morning was unable to pick up diesel at a Newcastle oil company depot destined for farmers and had to go to another supplier charging 35 cents a litre more.

Chief operating officer Nathan Laing said the inability to get sufficient wholesale diesel supplies meant they had to charge more to their agricultural customers, which would eventually push up food prices.

“We need to be able to supply that farmer so we either take the loss ourselves or it gets passed on downstream and it always gets passed on downstream - we wouldn’t be able to run the trucks if we took $14,000 losses every day,” he told The Nightly.

“Well, yes, it will push food prices higher.”

Dr Chalmers on Thursday morning said: “Overall, we have sufficient supplies of fuel.”

But with demand soaring at service stations, oil companies are prioritising the bigger service station retailers with contracts and reducing allocations to independent wholesalers who supply farmers.

“In the face of reasonably excessive demand, we’re getting access to less than a quarter to two-thirds of the volume we ordinarily would at prices that are remarkably higher than those publicly advertised,” Mr Laing said.

The Australian Institute of Petroleum confirmed oil suppliers were “being forced” to prioritise bulk fuel buyers from trucking companies to retailers who had existing contracts.

“All fuel suppliers have seen their spare (i.e. uncontracted) fuel disappear in the last fortnight with the surge of buying across the country,” Mr Roberts said.