❓ Mr Graham questions the Minister for Consumer Affairs regarding petroleum pricing and compensation for independent retailers disadvantaged by major oil companies. The Minister acknowledges the issue but declines immediate action, citing potential legal complications and preferring market forces to resolve contract disputes.
AnsweredQoN 27Legislative Assembly
QuestionView source ↗
PETROLEUM PRICES, COMPENSATION FOR RETAILERS 27. Mr GRAHAM to the Minister for Consumer Affairs: I guess one could say that we will now move from wowsers to bowsers. The 12 April order of the Prices Commissioner includes an exclusion to the maximum wholesale price order for resellers who are the subject of price agreements with major oil companies. That exclusion clause is a loophole that is being used by the oil majors to disadvantage independent retailers in the marketplace. Earlier today I gave the minister three separate statutory declarations that demonstrate clearly that the major oil companies are in breach of the Petroleum Products Pricing Act 1983. (1) Will the minister instruct the Prices Commissioner to take immediate action to order compensation for these retailers? (2) Will the minister also use the powers available to him under section 13 of the Act to strike down the loophole in the legislation? (3) If not, why not? Mr KOBELKE
AnswerView source ↗
I thank the member for Pilbara for some notice of the question. (1) I recognise up-front the member’s long interest in petrol pricing and trying to get the best deal for motorists, particularly in electorates such as his and the Speaker’s where fuel is so important. He was a key mover in the establishment of the select committee, whose recommendations we are seeking to implement through a Bill currently in the Parliament. The two matters the member raises are important and of some complexity. Perhaps I should make sure members understand the detail. First, when the maximum wholesale price was put in place by an order of 12 April, the actual wording of that order meant that the requirement to sell at the maximum wholesale price did not overturn contractual arrangements. The member is asking that the Government, with the stroke of a pen, strike that out, which would mean that existing contracts could simply be overturned and everyone would have to sell at that price. I am not willing to do that, and I should explain why. Mr Cowan: You cannot. Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
PETROLEUM PRICES, COMPENSATION FOR RETAILERS
I guess one could say that we will now move from wowsers to bowsers. The 12 April order of the Prices Commissioner includes an exclusion to the maximum wholesale price order for resellers who are the subject of price agreements with major oil companies. That exclusion clause is a loophole that is being used by the oil majors to disadvantage independent retailers in the marketplace. Earlier today I gave the minister three separate statutory declarations that demonstrate clearly that the major oil companies are in breach of the Petroleum Products Pricing Act 1983. (1) Will the minister instruct the Prices Commissioner to take immediate action to order compensation for these retailers? (2) Will the minister also use the powers available to him under section 13 of the Act to strike down the loophole in the legislation? (3) If not, why not? Mr KOBELKE replied: I thank the member for Pilbara for some notice of the question. (1) I recognise up-front the member’s long interest in petrol pricing and trying to get the best deal for motorists, particularly in electorates such as his and the Speaker’s where fuel is so important. He was a key mover in the establishment of the select committee, whose recommendations we are seeking to implement through a Bill currently in the Parliament. The two matters the member raises are important and of some complexity. Perhaps I should make sure members understand the detail. First, when the maximum wholesale price was put in place by an order of 12 April, the actual wording of that order meant that the requirement to sell at the maximum wholesale price did not overturn contractual arrangements. The member is asking that the Government, with the stroke of a pen, strike that out, which would mean that existing contracts could simply be overturned and everyone would have to sell at that price. I am not willing to do that, and I should explain why. Mr Cowan: You cannot. Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
(1) Will the minister instruct the Prices Commissioner to take immediate action to order compensation for these retailers? (2) Will the minister also use the powers available to him under section 13 of the Act to strike down the loophole in the legislation? (3) If not, why not? Mr KOBELKE replied: I thank the member for Pilbara for some notice of the question. (1) I recognise up-front the member’s long interest in petrol pricing and trying to get the best deal for motorists, particularly in electorates such as his and the Speaker’s where fuel is so important. He was a key mover in the establishment of the select committee, whose recommendations we are seeking to implement through a Bill currently in the Parliament. The two matters the member raises are important and of some complexity. Perhaps I should make sure members understand the detail. First, when the maximum wholesale price was put in place by an order of 12 April, the actual wording of that order meant that the requirement to sell at the maximum wholesale price did not overturn contractual arrangements. The member is asking that the Government, with the stroke of a pen, strike that out, which would mean that existing contracts could simply be overturned and everyone would have to sell at that price. I am not willing to do that, and I should explain why. Mr Cowan: You cannot. Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
(2) Will the minister also use the powers available to him under section 13 of the Act to strike down the loophole in the legislation? (3) If not, why not? Mr KOBELKE replied: I thank the member for Pilbara for some notice of the question. (1) I recognise up-front the member’s long interest in petrol pricing and trying to get the best deal for motorists, particularly in electorates such as his and the Speaker’s where fuel is so important. He was a key mover in the establishment of the select committee, whose recommendations we are seeking to implement through a Bill currently in the Parliament. The two matters the member raises are important and of some complexity. Perhaps I should make sure members understand the detail. First, when the maximum wholesale price was put in place by an order of 12 April, the actual wording of that order meant that the requirement to sell at the maximum wholesale price did not overturn contractual arrangements. The member is asking that the Government, with the stroke of a pen, strike that out, which would mean that existing contracts could simply be overturned and everyone would have to sell at that price. I am not willing to do that, and I should explain why. Mr Cowan: You cannot. Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
(3) If not, why not? Mr KOBELKE replied: I thank the member for Pilbara for some notice of the question. (1) I recognise up-front the member’s long interest in petrol pricing and trying to get the best deal for motorists, particularly in electorates such as his and the Speaker’s where fuel is so important. He was a key mover in the establishment of the select committee, whose recommendations we are seeking to implement through a Bill currently in the Parliament. The two matters the member raises are important and of some complexity. Perhaps I should make sure members understand the detail. First, when the maximum wholesale price was put in place by an order of 12 April, the actual wording of that order meant that the requirement to sell at the maximum wholesale price did not overturn contractual arrangements. The member is asking that the Government, with the stroke of a pen, strike that out, which would mean that existing contracts could simply be overturned and everyone would have to sell at that price. I am not willing to do that, and I should explain why. Mr Cowan: You cannot. Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
Mr KOBELKE replied: I thank the member for Pilbara for some notice of the question. (1) I recognise up-front the member’s long interest in petrol pricing and trying to get the best deal for motorists, particularly in electorates such as his and the Speaker’s where fuel is so important. He was a key mover in the establishment of the select committee, whose recommendations we are seeking to implement through a Bill currently in the Parliament. The two matters the member raises are important and of some complexity. Perhaps I should make sure members understand the detail. First, when the maximum wholesale price was put in place by an order of 12 April, the actual wording of that order meant that the requirement to sell at the maximum wholesale price did not overturn contractual arrangements. The member is asking that the Government, with the stroke of a pen, strike that out, which would mean that existing contracts could simply be overturned and everyone would have to sell at that price. I am not willing to do that, and I should explain why. Mr Cowan: You cannot. Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
I thank the member for Pilbara for some notice of the question. (1) I recognise up-front the member’s long interest in petrol pricing and trying to get the best deal for motorists, particularly in electorates such as his and the Speaker’s where fuel is so important. He was a key mover in the establishment of the select committee, whose recommendations we are seeking to implement through a Bill currently in the Parliament. The two matters the member raises are important and of some complexity. Perhaps I should make sure members understand the detail. First, when the maximum wholesale price was put in place by an order of 12 April, the actual wording of that order meant that the requirement to sell at the maximum wholesale price did not overturn contractual arrangements. The member is asking that the Government, with the stroke of a pen, strike that out, which would mean that existing contracts could simply be overturned and everyone would have to sell at that price. I am not willing to do that, and I should explain why. Mr Cowan: You cannot. Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
(1) I recognise up-front the member’s long interest in petrol pricing and trying to get the best deal for motorists, particularly in electorates such as his and the Speaker’s where fuel is so important. He was a key mover in the establishment of the select committee, whose recommendations we are seeking to implement through a Bill currently in the Parliament. The two matters the member raises are important and of some complexity. Perhaps I should make sure members understand the detail. First, when the maximum wholesale price was put in place by an order of 12 April, the actual wording of that order meant that the requirement to sell at the maximum wholesale price did not overturn contractual arrangements. The member is asking that the Government, with the stroke of a pen, strike that out, which would mean that existing contracts could simply be overturned and everyone would have to sell at that price. I am not willing to do that, and I should explain why. Mr Cowan: You cannot. Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
(2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
PETROLEUM PRICES, COMPENSATION FOR RETAILERS
I guess one could say that we will now move from wowsers to bowsers. The 12 April order of the Prices Commissioner includes an exclusion to the maximum wholesale price order for resellers who are the subject of price agreements with major oil companies. That exclusion clause is a loophole that is being used by the oil majors to disadvantage independent retailers in the marketplace. Earlier today I gave the minister three separate statutory declarations that demonstrate clearly that the major oil companies are in breach of the Petroleum Products Pricing Act 1983. (1) Will the minister instruct the Prices Commissioner to take immediate action to order compensation for these retailers? (2) Will the minister also use the powers available to him under section 13 of the Act to strike down the loophole in the legislation? (3) If not, why not? Mr KOBELKE replied: I thank the member for Pilbara for some notice of the question. (1) I recognise up-front the member’s long interest in petrol pricing and trying to get the best deal for motorists, particularly in electorates such as his and the Speaker’s where fuel is so important. He was a key mover in the establishment of the select committee, whose recommendations we are seeking to implement through a Bill currently in the Parliament. The two matters the member raises are important and of some complexity. Perhaps I should make sure members understand the detail. First, when the maximum wholesale price was put in place by an order of 12 April, the actual wording of that order meant that the requirement to sell at the maximum wholesale price did not overturn contractual arrangements. The member is asking that the Government, with the stroke of a pen, strike that out, which would mean that existing contracts could simply be overturned and everyone would have to sell at that price. I am not willing to do that, and I should explain why. Mr Cowan: You cannot. Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
(1) Will the minister instruct the Prices Commissioner to take immediate action to order compensation for these retailers? (2) Will the minister also use the powers available to him under section 13 of the Act to strike down the loophole in the legislation? (3) If not, why not? Mr KOBELKE replied: I thank the member for Pilbara for some notice of the question. (1) I recognise up-front the member’s long interest in petrol pricing and trying to get the best deal for motorists, particularly in electorates such as his and the Speaker’s where fuel is so important. He was a key mover in the establishment of the select committee, whose recommendations we are seeking to implement through a Bill currently in the Parliament. The two matters the member raises are important and of some complexity. Perhaps I should make sure members understand the detail. First, when the maximum wholesale price was put in place by an order of 12 April, the actual wording of that order meant that the requirement to sell at the maximum wholesale price did not overturn contractual arrangements. The member is asking that the Government, with the stroke of a pen, strike that out, which would mean that existing contracts could simply be overturned and everyone would have to sell at that price. I am not willing to do that, and I should explain why. Mr Cowan: You cannot. Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
(2) Will the minister also use the powers available to him under section 13 of the Act to strike down the loophole in the legislation? (3) If not, why not? Mr KOBELKE replied: I thank the member for Pilbara for some notice of the question. (1) I recognise up-front the member’s long interest in petrol pricing and trying to get the best deal for motorists, particularly in electorates such as his and the Speaker’s where fuel is so important. He was a key mover in the establishment of the select committee, whose recommendations we are seeking to implement through a Bill currently in the Parliament. The two matters the member raises are important and of some complexity. Perhaps I should make sure members understand the detail. First, when the maximum wholesale price was put in place by an order of 12 April, the actual wording of that order meant that the requirement to sell at the maximum wholesale price did not overturn contractual arrangements. The member is asking that the Government, with the stroke of a pen, strike that out, which would mean that existing contracts could simply be overturned and everyone would have to sell at that price. I am not willing to do that, and I should explain why. Mr Cowan: You cannot. Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
(3) If not, why not? Mr KOBELKE replied: I thank the member for Pilbara for some notice of the question. (1) I recognise up-front the member’s long interest in petrol pricing and trying to get the best deal for motorists, particularly in electorates such as his and the Speaker’s where fuel is so important. He was a key mover in the establishment of the select committee, whose recommendations we are seeking to implement through a Bill currently in the Parliament. The two matters the member raises are important and of some complexity. Perhaps I should make sure members understand the detail. First, when the maximum wholesale price was put in place by an order of 12 April, the actual wording of that order meant that the requirement to sell at the maximum wholesale price did not overturn contractual arrangements. The member is asking that the Government, with the stroke of a pen, strike that out, which would mean that existing contracts could simply be overturned and everyone would have to sell at that price. I am not willing to do that, and I should explain why. Mr Cowan: You cannot. Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
Mr KOBELKE replied: I thank the member for Pilbara for some notice of the question. (1) I recognise up-front the member’s long interest in petrol pricing and trying to get the best deal for motorists, particularly in electorates such as his and the Speaker’s where fuel is so important. He was a key mover in the establishment of the select committee, whose recommendations we are seeking to implement through a Bill currently in the Parliament. The two matters the member raises are important and of some complexity. Perhaps I should make sure members understand the detail. First, when the maximum wholesale price was put in place by an order of 12 April, the actual wording of that order meant that the requirement to sell at the maximum wholesale price did not overturn contractual arrangements. The member is asking that the Government, with the stroke of a pen, strike that out, which would mean that existing contracts could simply be overturned and everyone would have to sell at that price. I am not willing to do that, and I should explain why. Mr Cowan: You cannot. Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
I thank the member for Pilbara for some notice of the question. (1) I recognise up-front the member’s long interest in petrol pricing and trying to get the best deal for motorists, particularly in electorates such as his and the Speaker’s where fuel is so important. He was a key mover in the establishment of the select committee, whose recommendations we are seeking to implement through a Bill currently in the Parliament. The two matters the member raises are important and of some complexity. Perhaps I should make sure members understand the detail. First, when the maximum wholesale price was put in place by an order of 12 April, the actual wording of that order meant that the requirement to sell at the maximum wholesale price did not overturn contractual arrangements. The member is asking that the Government, with the stroke of a pen, strike that out, which would mean that existing contracts could simply be overturned and everyone would have to sell at that price. I am not willing to do that, and I should explain why. Mr Cowan: You cannot. Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
(1) I recognise up-front the member’s long interest in petrol pricing and trying to get the best deal for motorists, particularly in electorates such as his and the Speaker’s where fuel is so important. He was a key mover in the establishment of the select committee, whose recommendations we are seeking to implement through a Bill currently in the Parliament. The two matters the member raises are important and of some complexity. Perhaps I should make sure members understand the detail. First, when the maximum wholesale price was put in place by an order of 12 April, the actual wording of that order meant that the requirement to sell at the maximum wholesale price did not overturn contractual arrangements. The member is asking that the Government, with the stroke of a pen, strike that out, which would mean that existing contracts could simply be overturned and everyone would have to sell at that price. I am not willing to do that, and I should explain why. Mr Cowan: You cannot. Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
Mr KOBELKE: I may not be able to do it because the wording in the order is the same as the wording in the Act. A point is arguable there, but it is not now appropriate to enter into a debate about whether I can or I cannot. The point is that it is not clear cut whether I can do it. If I did, it is not certain what the consequences of litigation would be as people squabbled over what is now the basis of the contract. Therefore, it would end up being a field day for lawyers as they tried to work that out. The key issue is that, as a matter of principle, we do not want to retrospectively overturn those contracts. In only very special circumstances would the Government do that. The Government believes that through the range of other measures it is putting in place, it will be able to get those competitive pressures and not be required to renege on existing contracts. I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
I will make one more comment on this matter before I move to the member’s second point. If a retailer is locked into a contract with a supplier at a price above the maximum wholesale price, but the maximum wholesale price is available to other retailers in the market, market forces will come into play on that retailer and that contract of supply. If someone down the road can get fuel at the maximum wholesale price of, say, 90c to 91c and is therefore retailing at a price that flows from that, the contract will be undermined if it is too high. I would prefer that the market forces do it, rather than the minister abrogate what is a proper contract. Therefore, I am not willing to meet that request. (2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
(2)-(3) The second request in the question is to take up the issue whereby retailers have gone to a supplier asking to buy fuel at the maximum wholesale price and some terminals have refused to supply. I thank the member for the statutory declarations he gave me in the past few minutes. I will pass those to the ministry to add to the complaints that have already been received. That matter is being investigated and action will be taken on it. The member for Pilbara is suggesting that I should order the commissioner to immediately put in place a claim for compensation for the retailer because the supplier has failed to supply. That is one measure that is open. However, it is open to put in place a compensation order and to prosecute. The Government is currently seeking legal advice on whether taking action on one leg would undermine taking action on the other. The Government wants to make sure that it has the option to prosecute and to require compensation orders, and it will do that on good legal advice so that it is effective in the action it wishes to take. If that action is effective, it will have much greater repercussions throughout the whole industry. Rather than a knee-jerk reaction of getting in quickly and asking for a compensation order, the Government will move on the basis that its action will be effective.
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