Kiwi motorists are set to reap the benefits of a more competitive fuel market following the passing of the Fuel Industry Bill tonight, Energy and Resources Minister Megan Woods says.
“This Act is where the rubber meets the road in terms of our response to the recommendations made in the Government-ordered fuel market study by the Commerce Commission, and it will deliver lower prices to motorists by making the sector more competitive,” said Megan Woods.
“The study found motorists were being short-changed on the price of petrol over the past decade because of a lack of competition and we are making things fairer for those in the market and motorists alike.
“These changes will allow smaller players to gain access to cheaper fuel which will mean other retailers will need to adjust their prices or risk losing customers.
“Motorists have waited too long for action on the entrenched problems in the fuel market. Fuel prices are a major bugbear for consumers and we passed the legislation as quickly as possible to deliver improved competition. The changes at the wholesale end of the market will flow through to consumers with lower prices at the pump.”
“We recognise the importance of fairness and transparency in the market and are pleased to get these changes underway.”
The Act establishes:
- a terminal gate pricing regime to improve competition in the wholesale market by making it easier for a fuel reseller to access fuel more cheaply and in more locations
- rules to ensure contracts between wholesale fuel suppliers and their wholesale customers are fair and support competition
- a dispute resolution scheme for the new regime
- improvements to the monitoring of the fuel market by requiring fuel companies to collect and disclose certain information
- requirements for retail fuel sites to display premium fuel prices on forecourt price boards
“The combined impact of the suite of provisions is expected to boost competition, allowing smaller players better access to fuel to apply downward pressure on prices, and to better inform motorists before they pull into a forecourt,” said Megan Woods.