Energy and Resources Minister Judith Collins has today announced a Market Study into fuel prices/returns to be undertaken by the Ministry of Business, Innovation and Employment (MBIE).
The Fuel Market Financial Performance Study, which is expected to be completed by the end of June is designed to determine how fair petrol and diesel prices are at the pump. It will delve into the finances of oil companies and report on their returns, and look to see whether they're making "super-normal profits" or not.
The market study comes after the AA noticed prices between the South Island and the rest of the country varied by as much as 40c a litre.
Collins says MBIE data shows fuel margins have more than doubled in the past five years.
"The market study will report on fuel company returns and will include in-depth analysis of oil companies' finances," she said.
Collins says the market study can be done reasonably quickly "and will help to build a more informed picture of the overall performance of the fuel market". She is confident the companies will work with MBIE.
"It is in the best interests of everyone, including oil companies, to make sure New Zealand has quality, reliable and reasonably priced fuel," says Collins.
The national price of fuel rose by five cents per litre in January and government figures show the difference between what the fuel companies pay for petrol and what they sell it for has risen to 35 cents per litre.
But the AA says that doesn't make sense.
"When we look at commodity prices and exchange rate movements we don't understand why prices rose by five cents," AA PetrolWatch spokesman Mark Stockdale says.
"In fact, if anything the retail price should have fallen and not gone up," he said.
What do you have to say about this fellow Cheapies? It's about time we have a investigation into the varying prices, I believe, and recognition should be given to Judith Collins for launching the investigation.
Sources: MBIE Press Release and Newshub.
Politicking, its unlikely that this will result in anything more than an elbow to the ribs for the petroleum sector. While the government can regulate anything they like, this kind of investigations tend to be a 'we need to been seen as if the govt cares when the consumer feels like they are being over charged'.
To be honest I just wish the govt wasn't making 'super normal profits' on our petrol price. http://www.aa.co.nz/cars/maintenance/fuel-prices-and-types/p…