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Market study into retail fuel

The Commerce Commission has launched a market study into the retail fuel sector.
Posted on 07 December, 2018
Market study into retail fuel

The Commerce Commission has commenced a market study into factors that may affect competition for the supply of retail petrol and diesel used for land transport throughout New Zealand.

The purpose of the study is to consider and evaluate whether competition in the retail fuel market is promoting outcomes that benefit New Zealand consumers over the long-term. The study is focused on the supply of retail petrol and diesel for use in land transport. 

Chairman Dr Mark Berry said the retail fuel market plays a large role in the domestic economy, with prices at the pump directly affecting all New Zealanders. In the year to June 2018 total retail sales of petrol and diesel amounted to more than $8 billion.

“We are aware of recent concerns relating to retail fuel prices. Our role is to provide an objective and independent assessment of the level of competition in this market and what factors may be impacting on it,” Berry said.

“We will shortly be issuing information requests to selected sector participants and seeking information from a range of other parties involved with this industry. This is a complex market and we expect we will need the full 12 months to complete the study, as the Government has allowed for. We intend to publish working papers during the first half of this study, with a draft report released by August next year and the final report in December.”

The terms of reference for this study require the Commission to focus on the retail market for petrol and diesel used for land transport. The study will not assess competition in other fuel markets, such as aviation or marine.

The Commission will next week publish a process paper on the fuel study. Prior to Christmas, it plans to release a statement of preliminary issues that interested parties will be invited to submit on.

The Commission will also next week publish and invite submissions on draft guidelines that will govern its approach to all market studies, with submissions closing on 31 January 2019.

The Commission has set up a dedicated webpage for the retail fuel study that will be updated as the study progresses.

The process paper and draft guidelines will be available on this page by Wednesday 12 December 2018.