Regional centres subject to fuel studies

THREE yet-to-be-named regional centres will be the target of specific Australian Consumer and Competition Commission investigations this year following reports of large differences between city and country fuel prices.

ACCC chairman Rod Sims today provided additional details on the commission's new powers to monitor and analyse fuel markets.

He said the ACCC would launch 'micro' reports into three geographic areas in the next 12 months after becoming concerned with large fuel price discrepancies found across regional and metropolitan centres in the six months to January.

In July last year, ACCC found the monthly average retail price of petrol across regional locations in Australia was 5.7 cents per litre higher than prices in the five largest cities.

By December, the average difference had increased to 17.6 cents per litre.

Mr Sims said drops in world oil prices should have been flowing on to regional areas sooner than they had.

"Motorists in our larger capital cities have therefore seen the benefit of lower international prices but consumers in a number of regional locations have not," he said.

"While lags are expected, as older stocks can take longer to run down in regional locations, we would expect the falls to be passed on reasonably quickly."

Mr Sims said the ACCC's new information gathering powers meant it would now start to analyse the retail, wholesale and benchmark prices for about 180 regional locations.

"We are looking at factors such as price differentials between regional markets and larger cities, differentials between towns of similar size and the variability of prices in regional markets over the past three years to assist us in determining the first target markets," he said.

Mr Sims said three regional locations would be studied further in coming months, with the first to be announced in March. 

Fuel markets and businesses under scrutiny would be asked to provide compulsory information to the commission, Mr Sims said. 

"We will only name the regional locations to be studied in this way once the compulsory notices have been issued," he said.

"Otherwise we run the risk that market behaviours change before our study begins."

He said the ACCC understood that many regional communities would want to be among the first target markets, but that he also expected some "positive pressure" on regional fuel prices would result from yesterday's announcement.