Petrol price margins

MBIE has data on the average margin for petrol in NZ, taking into account the global price of supply.

Apart from the very recent adjustment in January, one can see a clear trend over the last few years of the margin growing from the normal 10c to 15c range to between 25c and 40c.

Stuff reports:

Labour wants a parliamentary inquiry into fuel costs, concerned that consumers are being ripped off by “unscrupulous merchants”.

While petrol and diesel prices have got cheaper by as much as 50 cents a litre in the last year, consumer advocates say industry profit margins are high and the price at the pump could come down further. There are also questions over rural variations in price.

Labour’s energy spokesman, Stuart Nash, has asked the finance and expenditure select committee to investigate, and the committee will make a decision next week.

The request follows a call from the Automobile Association last month for a ministerial inquiry. Across the Tasman, the Australian Competition and Consumer Commission is looking at fuel costs.

Nash wants MPs on the select committee to look at pricing and margins along the supply chain.

I agree with Labour that a select committee inquiry would be a good thing. The market is not as competitive as it should be, with a doubling of margins in recent years. The answer is not price controls, but it is worth looking at how to improve competition.