Treasurer Jim Chalmers hints at fines for oil companies for price fixing without Federal Court hearings

Oil companies operating in Australia have been warned they face on-the-spot fines for dishonest conduct after executives were hauled before the competition watchdog and asked to explain the big spike in fuel prices.

With retail fuel prices soaring in tandem with crude oil price surges without the usual delays — and in some cases going higher — Australian Competition and Consumer Commission chair Gina Cass-Gottlieb warned representatives from the likes of Ampol, BP, ExxonMobil, United Petroleum and Viva Energy she was watching them closely.

“If we find there is conduct that is collusive, for example any agreements to divide up or supply certain customers or set prices, or any other collusion in breach of competition laws, we will investigate it and take action,” she said.

Treasurer Jim Chalmers suggested oil companies could be fined without having to be prosecuted in the Federal Court.

“We made it possible for the ACCC to issue on-the-spot fines — so some go through the court system, some are on-the-spot fines,” he said, citing Mobil’s $16 million fine in February for making misleading claims about fuel sold in regional Queensland.

“From my point of view, there have been concerning developments in prices, obviously, and the reason it’s so important they were called in to explain themselves to the ACCC today is because these price changes need to be justified.”

He will bring forward legislation next week to double to $100 million maximum penalties for collusion and deceptive conduct.

Energy Minister Chris Bowen declared that petrol rationing wasn’t the answer to fixing fuel shortages, after Defence Minister Richard Marles suggested it was an option amid uncertainty about how long the Middle East conflict would last.

Mr Marles told Sunrise there wouldn’t be fuel rationing, having earlier failed to rule it out in an interview with the ABC.

“But clearly, you know, we are mindful of what’s playing out in the Middle East and, you know, we can’t say how long this conflict will go. And with that in mind, we are trying to make sure that we are as prudent as possible about what happens in the coming weeks and months,” he told Seven’s Natalie Barr.

“So no rationing at this stage?” she asked, prompting the blunt reply: “No”.

Mr Bowen went into damage control after meeting with farmers, truckers, the fertiliser industry and the peak body for the petroleum sector, stressing April crude oil deliveries were on schedule.

“I’ve been very clear: we are not anticipating that,” he said when asked directly about rationing.

“We are increasing fuel supply; making that work is harder if it all gets consumed straight away in that panic buying.

“You might advocate for rationing now … We’re not doing that because we don’t believe at this point that’s what is the best solution.”

However, he confirmed that petrol stations could put their own restrictions in place if they chose.

He also said the Commonwealth was talking to the States “about forward planning” and that the powers were in place across jurisdictions if they did need to start looking at restrictions.

“No minister will seek to use those unless they’re absolutely necessary,” he said.

Professor Allan Fels, a former chairman of the ACCC, said rationing was likely but hard to enforce.

“In the modern economy, with its complexity, diversity and so on, it would be a nightmare,” he told The Nightly.

One Nation MP and former Nationals leader Barnaby Joyce said at the weekend that Australia should “100 per cent” be rationing fuel.

But Opposition Leader Angus Taylor said on Tuesday that doing so would be akin to admitting failure.

“You shouldn’t need rationing if you’re actually on top of the issues. Rationing is something you do when you fail,” he told reporters in Walla Walla, where he is on the campaign trail for the by-election in Sussan Ley’s former seat of Farrer.

Professor Fels said the price gouging situation was so dire the Federal government may have to introduce legislation to regulate the wholesale or terminal gate price of fuel, reviving an arrangement that existed until deregulation in August 1998.

“That is easier to do, administratively,” Professor Fels said.

“In general, ever since the war began, there’s been price gouging in the sense that prices have gone up ahead of cost increases.”

New laws could also enforce a time lag so retail prices increased several days after increases in crude oil prices.

“If there prove to be serious, persistent shortages and associated price rises, they may have to legislate for some kind of price scrutiny,” Professor Fels said.

“It gives some assurance to the public that there’s not outright ripoffs — if you’ve got a law and a body looking at people’s prices and ability to expose, ability to delay price rises for a week or two, it has a bit of an effect taking the edge off the top.”

But with crude oil prices at $US96 a barrel, motorists in capital cities are paying $2.40 a litre for unleaded.

Wholesale prices on Tuesday, as reported by the Australian Institute of Petroleum, ranged from $2.24 to $2.27 a litre.

“If the crude oil price goes much above one-hundred, then there will be even more painful price rises than at present,” Professor Fels said. “There’s no limit on how high.”

Westpac head of business and industry economics Sian Fenner predicted the US and Israel-led war in Iran could continue for another month.

“Our baseline assumes the conflict lasts around one month but that it takes at least a further month for shipping through the Strait of Hormuz to normalise given the risks of sporadic attacks and elevated insurance costs even after hostilities ease,” she said.