The Australian Institute of Petroleum (AIP) and major oil refineries will be allowed to continue to cooperate on measures to ensure the security of fuel supplies in Australia during the COVID-19 pandemic, under a proposed authorisation from the ACCC.
The COVID-19 pandemic has caused a significant decline in demand for jet fuel and petrol in Australia, and there is a potential for disruptions to the international supply chains for fuel imported into Australia.
To manage the risks associated with large and unpredictable changes in demand and supply, the proposed authorisation would allow refineries and AIP, the industry’s peak body, to make co-ordinated arrangements designed to secure fuel supplies nation-wide.
The arrangements could involve a range of bodies, including customers for wholesale fuel, suppliers of crude oil and refined fuels, fuel importers, storage facility operators and trucking and delivery services.
“We believe that allowing fuel companies to coordinate the scheduling of importation, storage and delivery in these exceptional times will provide the fuel sector with more capability to help ensure security of supply of fuel products in Australia, and minimise the risk of shortages,” ACCC Commissioner Stephen Ridgeway said.
“We issued an interim authorisation for this conduct in April, and we believe there are public benefits in allowing it to continue.”
The ACCC is proposing the conduct be authorised for six months from the date of the final determination, rather than the twelve months sought by the applicants, as the ACCC is not convinced that the longer period is required for the authorisation.
“In assessing these COVID-19 applications, we have been seeking to ensure that the disruption caused by the pandemic is being dealt with effectively through coordination, while at the same time avoiding any long-lasting or structural changes in markets,” Mr Ridgeway said.
The authorisation applies to AIP and oil refineries BP Australia, Caltex Australia, Mobil Oil Australia and Viva Energy Australia but does not allow any coordination in relation to fuel prices.
Participation is not compulsory and AIP will be required to provide minutes of any relevant meetings under the authorisation.
AIP must seek approval from the ACCC to add future parties to the authorisation and the ACCC may also request further information from AIP or its members.
The ACCC invites submissions on the draft determination from interested parties by 14 August 2020.
More information, including the ACCC’s statement of reasons, is available at Australian Institute of Petroleum.
ACCC authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010.
Broadly, the ACCC may grant a final authorisation when it is satisfied that the likely public benefit from the conduct outweighs any likely public detriment.