Dr Gallop questions Premier Court on his reluctance to regulate fuel prices, despite a bipartisan committee recommendation. Premier Court outlines a plan to address price differentials between city and country fuel prices, giving oil companies six weeks to demonstrate competitive pricing before potential government intervention.

AnsweredQoN 270Legislative Assembly
Asked
18 October 2000
Member
Portfolio
Premier

QuestionView source ↗

(1) The Minister for Fair Trading was unable yesterday to explain what the Premier meant when he said it was his preference for oil companies to self-regulate. Can the Premier now provide an explanation to the House? (2) Why is the Premier so reluctant to regulate the price of fuel when it is what the bipartisan Select Committee on Petroleum Products Pricing in Western Australia of the Parliament claimed should be done immediately? Mr COURT

AnswerView source ↗

(1)-(2) Cabinet held a discussion on these matters and it ran through the recommendations of the report. The committee that the minister established met on Monday morning. It has already prepared a response to the recommendations. Some of the proposals can be implemented without legislative change. One of them is the recommendation to cap country fuel prices. The Government is currently in discussion with all of the parties involved about whether it will use the pricing mechanism. It is currently working out the details. The Government wants transparency in pricing and the ability to insist on, and direct, pricing. Advice received to date is that the commissioner will be able to direct oil companies to publish a true terminal gate price. The Government will define how the price is to be determined. Dr Gallop: What about the maximum price? Mr COURT: I will tell the Leader of the Opposition what the Government intends to do. The concern highlighted in the report is the differential over time, that is, the average of prices between the country and the city. The Government will tell the oil companies that, within the next six weeks, if they have not demonstrated that the differential pricing - that is currently too high and of which we have accurate records - has come down significantly, the Government will implement country pricing control. That is what the Government will put to the operators. Mr Ripper: So the Government is setting a deadline for the end of November? Mr COURT: That is right. The deadline is six weeks away. If the differential, on average, has not come down, the Government is prepared to use the existing legislation to bring the differential down. The Government does not accept that in regional centres, such as Bunbury or Geraldton, price differential has to exist that is significantly high and well above transport costs. Dr Gallop: If that is the case why doesn’t the Government adopt all the report's recommendations now? Mr COURT: The Government accepts the advice but it is putting one step in the middle. The one step in the middle is to give them the opportunity to demonstrate that without price controls they can have a competitive regime operating in the country. The Government will give them the opportunity. I share the concerns expressed by the Chamber of Minerals and Energy of Western Australia that if we come down too heavily with price control we could end up with higher prices. Evidence was provided that petrol prices were cheaper in 1998 than in 1992, when the controls were last in place. Mr Ripper: When is it going to start? Mr COURT: It has started. The process started when the report came down. The report highlighted that the differentials were much higher than could be accounted for by freight costs and the like.
(2) Why is the Premier so reluctant to regulate the price of fuel when it is what the bipartisan Select Committee on Petroleum Products Pricing in Western Australia of the Parliament claimed should be done immediately? Mr COURT replied: (1)-(2) Cabinet held a discussion on these matters and it ran through the recommendations of the report. The committee that the minister established met on Monday morning. It has already prepared a response to the recommendations. Some of the proposals can be implemented without legislative change. One of them is the recommendation to cap country fuel prices. The Government is currently in discussion with all of the parties involved about whether it will use the pricing mechanism. It is currently working out the details. The Government wants transparency in pricing and the ability to insist on, and direct, pricing. Advice received to date is that the commissioner will be able to direct oil companies to publish a true terminal gate price. The Government will define how the price is to be determined. Dr Gallop: What about the maximum price? Mr COURT: I will tell the Leader of the Opposition what the Government intends to do. The concern highlighted in the report is the differential over time, that is, the average of prices between the country and the city. The Government will tell the oil companies that, within the next six weeks, if they have not demonstrated that the differential pricing - that is currently too high and of which we have accurate records - has come down significantly, the Government will implement country pricing control. That is what the Government will put to the operators. Mr Ripper: So the Government is setting a deadline for the end of November? Mr COURT: That is right. The deadline is six weeks away. If the differential, on average, has not come down, the Government is prepared to use the existing legislation to bring the differential down. The Government does not accept that in regional centres, such as Bunbury or Geraldton, price differential has to exist that is significantly high and well above transport costs. Dr Gallop: If that is the case why doesn’t the Government adopt all the report's recommendations now? Mr COURT: The Government accepts the advice but it is putting one step in the middle. The one step in the middle is to give them the opportunity to demonstrate that without price controls they can have a competitive regime operating in the country. The Government will give them the opportunity. I share the concerns expressed by the Chamber of Minerals and Energy of Western Australia that if we come down too heavily with price control we could end up with higher prices. Evidence was provided that petrol prices were cheaper in 1998 than in 1992, when the controls were last in place. Mr Ripper: When is it going to start? Mr COURT: It has started. The process started when the report came down. The report highlighted that the differentials were much higher than could be accounted for by freight costs and the like.
Mr COURT replied: (1)-(2) Cabinet held a discussion on these matters and it ran through the recommendations of the report. The committee that the minister established met on Monday morning. It has already prepared a response to the recommendations. Some of the proposals can be implemented without legislative change. One of them is the recommendation to cap country fuel prices. The Government is currently in discussion with all of the parties involved about whether it will use the pricing mechanism. It is currently working out the details. The Government wants transparency in pricing and the ability to insist on, and direct, pricing. Advice received to date is that the commissioner will be able to direct oil companies to publish a true terminal gate price. The Government will define how the price is to be determined. Dr Gallop: What about the maximum price? Mr COURT: I will tell the Leader of the Opposition what the Government intends to do. The concern highlighted in the report is the differential over time, that is, the average of prices between the country and the city. The Government will tell the oil companies that, within the next six weeks, if they have not demonstrated that the differential pricing - that is currently too high and of which we have accurate records - has come down significantly, the Government will implement country pricing control. That is what the Government will put to the operators. Mr Ripper: So the Government is setting a deadline for the end of November? Mr COURT: That is right. The deadline is six weeks away. If the differential, on average, has not come down, the Government is prepared to use the existing legislation to bring the differential down. The Government does not accept that in regional centres, such as Bunbury or Geraldton, price differential has to exist that is significantly high and well above transport costs. Dr Gallop: If that is the case why doesn’t the Government adopt all the report's recommendations now? Mr COURT: The Government accepts the advice but it is putting one step in the middle. The one step in the middle is to give them the opportunity to demonstrate that without price controls they can have a competitive regime operating in the country. The Government will give them the opportunity. I share the concerns expressed by the Chamber of Minerals and Energy of Western Australia that if we come down too heavily with price control we could end up with higher prices. Evidence was provided that petrol prices were cheaper in 1998 than in 1992, when the controls were last in place. Mr Ripper: When is it going to start? Mr COURT: It has started. The process started when the report came down. The report highlighted that the differentials were much higher than could be accounted for by freight costs and the like.
(1)-(2) Cabinet held a discussion on these matters and it ran through the recommendations of the report. The committee that the minister established met on Monday morning. It has already prepared a response to the recommendations. Some of the proposals can be implemented without legislative change. One of them is the recommendation to cap country fuel prices. The Government is currently in discussion with all of the parties involved about whether it will use the pricing mechanism. It is currently working out the details. The Government wants transparency in pricing and the ability to insist on, and direct, pricing. Advice received to date is that the commissioner will be able to direct oil companies to publish a true terminal gate price. The Government will define how the price is to be determined. Dr Gallop: What about the maximum price? Mr COURT: I will tell the Leader of the Opposition what the Government intends to do. The concern highlighted in the report is the differential over time, that is, the average of prices between the country and the city. The Government will tell the oil companies that, within the next six weeks, if they have not demonstrated that the differential pricing - that is currently too high and of which we have accurate records - has come down significantly, the Government will implement country pricing control. That is what the Government will put to the operators. Mr Ripper: So the Government is setting a deadline for the end of November? Mr COURT: That is right. The deadline is six weeks away. If the differential, on average, has not come down, the Government is prepared to use the existing legislation to bring the differential down. The Government does not accept that in regional centres, such as Bunbury or Geraldton, price differential has to exist that is significantly high and well above transport costs. Dr Gallop: If that is the case why doesn’t the Government adopt all the report's recommendations now? Mr COURT: The Government accepts the advice but it is putting one step in the middle. The one step in the middle is to give them the opportunity to demonstrate that without price controls they can have a competitive regime operating in the country. The Government will give them the opportunity. I share the concerns expressed by the Chamber of Minerals and Energy of Western Australia that if we come down too heavily with price control we could end up with higher prices. Evidence was provided that petrol prices were cheaper in 1998 than in 1992, when the controls were last in place. Mr Ripper: When is it going to start? Mr COURT: It has started. The process started when the report came down. The report highlighted that the differentials were much higher than could be accounted for by freight costs and the like.
Dr Gallop: What about the maximum price? Mr COURT: I will tell the Leader of the Opposition what the Government intends to do. The concern highlighted in the report is the differential over time, that is, the average of prices between the country and the city. The Government will tell the oil companies that, within the next six weeks, if they have not demonstrated that the differential pricing - that is currently too high and of which we have accurate records - has come down significantly, the Government will implement country pricing control. That is what the Government will put to the operators. Mr Ripper: So the Government is setting a deadline for the end of November? Mr COURT: That is right. The deadline is six weeks away. If the differential, on average, has not come down, the Government is prepared to use the existing legislation to bring the differential down. The Government does not accept that in regional centres, such as Bunbury or Geraldton, price differential has to exist that is significantly high and well above transport costs. Dr Gallop: If that is the case why doesn’t the Government adopt all the report's recommendations now? Mr COURT: The Government accepts the advice but it is putting one step in the middle. The one step in the middle is to give them the opportunity to demonstrate that without price controls they can have a competitive regime operating in the country. The Government will give them the opportunity. I share the concerns expressed by the Chamber of Minerals and Energy of Western Australia that if we come down too heavily with price control we could end up with higher prices. Evidence was provided that petrol prices were cheaper in 1998 than in 1992, when the controls were last in place. Mr Ripper: When is it going to start? Mr COURT: It has started. The process started when the report came down. The report highlighted that the differentials were much higher than could be accounted for by freight costs and the like.
Mr COURT: I will tell the Leader of the Opposition what the Government intends to do. The concern highlighted in the report is the differential over time, that is, the average of prices between the country and the city. The Government will tell the oil companies that, within the next six weeks, if they have not demonstrated that the differential pricing - that is currently too high and of which we have accurate records - has come down significantly, the Government will implement country pricing control. That is what the Government will put to the operators. Mr Ripper: So the Government is setting a deadline for the end of November? Mr COURT: That is right. The deadline is six weeks away. If the differential, on average, has not come down, the Government is prepared to use the existing legislation to bring the differential down. The Government does not accept that in regional centres, such as Bunbury or Geraldton, price differential has to exist that is significantly high and well above transport costs. Dr Gallop: If that is the case why doesn’t the Government adopt all the report's recommendations now? Mr COURT: The Government accepts the advice but it is putting one step in the middle. The one step in the middle is to give them the opportunity to demonstrate that without price controls they can have a competitive regime operating in the country. The Government will give them the opportunity. I share the concerns expressed by the Chamber of Minerals and Energy of Western Australia that if we come down too heavily with price control we could end up with higher prices. Evidence was provided that petrol prices were cheaper in 1998 than in 1992, when the controls were last in place. Mr Ripper: When is it going to start? Mr COURT: It has started. The process started when the report came down. The report highlighted that the differentials were much higher than could be accounted for by freight costs and the like.
Mr Ripper: So the Government is setting a deadline for the end of November? Mr COURT: That is right. The deadline is six weeks away. If the differential, on average, has not come down, the Government is prepared to use the existing legislation to bring the differential down. The Government does not accept that in regional centres, such as Bunbury or Geraldton, price differential has to exist that is significantly high and well above transport costs. Dr Gallop: If that is the case why doesn’t the Government adopt all the report's recommendations now? Mr COURT: The Government accepts the advice but it is putting one step in the middle. The one step in the middle is to give them the opportunity to demonstrate that without price controls they can have a competitive regime operating in the country. The Government will give them the opportunity. I share the concerns expressed by the Chamber of Minerals and Energy of Western Australia that if we come down too heavily with price control we could end up with higher prices. Evidence was provided that petrol prices were cheaper in 1998 than in 1992, when the controls were last in place. Mr Ripper: When is it going to start? Mr COURT: It has started. The process started when the report came down. The report highlighted that the differentials were much higher than could be accounted for by freight costs and the like.
Mr COURT: That is right. The deadline is six weeks away. If the differential, on average, has not come down, the Government is prepared to use the existing legislation to bring the differential down. The Government does not accept that in regional centres, such as Bunbury or Geraldton, price differential has to exist that is significantly high and well above transport costs. Dr Gallop: If that is the case why doesn’t the Government adopt all the report's recommendations now? Mr COURT: The Government accepts the advice but it is putting one step in the middle. The one step in the middle is to give them the opportunity to demonstrate that without price controls they can have a competitive regime operating in the country. The Government will give them the opportunity. I share the concerns expressed by the Chamber of Minerals and Energy of Western Australia that if we come down too heavily with price control we could end up with higher prices. Evidence was provided that petrol prices were cheaper in 1998 than in 1992, when the controls were last in place. Mr Ripper: When is it going to start? Mr COURT: It has started. The process started when the report came down. The report highlighted that the differentials were much higher than could be accounted for by freight costs and the like.
Dr Gallop: If that is the case why doesn’t the Government adopt all the report's recommendations now? Mr COURT: The Government accepts the advice but it is putting one step in the middle. The one step in the middle is to give them the opportunity to demonstrate that without price controls they can have a competitive regime operating in the country. The Government will give them the opportunity. I share the concerns expressed by the Chamber of Minerals and Energy of Western Australia that if we come down too heavily with price control we could end up with higher prices. Evidence was provided that petrol prices were cheaper in 1998 than in 1992, when the controls were last in place. Mr Ripper: When is it going to start? Mr COURT: It has started. The process started when the report came down. The report highlighted that the differentials were much higher than could be accounted for by freight costs and the like.
Mr COURT: The Government accepts the advice but it is putting one step in the middle. The one step in the middle is to give them the opportunity to demonstrate that without price controls they can have a competitive regime operating in the country. The Government will give them the opportunity. I share the concerns expressed by the Chamber of Minerals and Energy of Western Australia that if we come down too heavily with price control we could end up with higher prices. Evidence was provided that petrol prices were cheaper in 1998 than in 1992, when the controls were last in place. Mr Ripper: When is it going to start? Mr COURT: It has started. The process started when the report came down. The report highlighted that the differentials were much higher than could be accounted for by freight costs and the like.
Mr Ripper: When is it going to start? Mr COURT: It has started. The process started when the report came down. The report highlighted that the differentials were much higher than could be accounted for by freight costs and the like.
Mr COURT: It has started. The process started when the report came down. The report highlighted that the differentials were much higher than could be accounted for by freight costs and the like.

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