3 August 2015
Transcript - #2015092, 2015

Interview with Alan Jones, 2GB Breakfast, Sydney

SUBJECTS: Petrol pricing, ATM charges

ALAN JONES:

Now, your anger over petrol prices is palpable.

Last Thursday, as I told you, doing his customary survey down the Pacific Highway, Paul does this every day for me. He found the average price was 147.9 cents a litre, Paul, last Thursday.

That same petrol a day earlier, 126.3 cents a litre – an increase of 21.6 cents a litre, 15 per cent overnight.

As I have said a million times, if the price of anything else rose by almost 15 per cent overnight there would be rioting in the streets. Yet we just seem to roll over and accept it when it is petrol because we are desperate, we fill up the car, we have got to make a quid. There has been no significant change to the value of the dollar or the price of oil, yet prices at the bowser rise by almost 22 cents a litre overnight. Paul told me nearly every service station he passed had exactly the same price. Is that coincidence of collusion?

We went through the same business exactly two weeks earlier, the dollar and oil virtually unchanged yet again. The prices rose by 19 cents a day in one hit.

Now Bruce Billson is the man who, to his credit, sticks his head up. But he is the Federal Minister for Small Business and as people are driving to work, and often filling the car on the way, they would be open to some news that they are not going to get ripped off again by oil companies.

But I tell you something, Governments are not prepared to take on oil companies.

We have a situation here in New South Wales where the law says that there must be six per cent of all petrol sold have 10 per cent of ethanol content. That’s all.  What does the Government of New South Wales do? It exempts the oil companies from the law. Does anyone exempt you from the law? It exempts the oil companies, the oil companies are breaking the law, the oil companies here are stealing from the motorist. Bruce Billson is on the line, Minister good morning.

MINISTER BILLSON:

Good morning to you Alan and your listeners.

ALAN JONES:

Can you understand the anger, not just at the petrol price being where it is, but that nothing is done to these people.

MINISTER BILLSON:

I guess the answers would be yes and no. I understand the anger but the suggestion that nothing is going on is simply incorrect.

ALAN JONES:

Well what is going on?

MINISTER BILLSON:

Well there is a range of things, in the case the…

ALAN JONES:

It is not stopping them.

MINISTER BILLSON:

… coincidental crab walk of something we might describe where we see petrol prices seeming to move in unison as if they are all in lock step with each other. There is enforcement action underway at the moment for anti-competitive behaviour involving an information sharing service where the big petrol retailers all tell this one point what they are doing with their fuel and miraculously that information is shared across other major petrol retailers. Not shared with the motorist, but shared across other petrol retailers and miraculously if one puts them up, they all go up.

So there is some enforcement action in the courts at the moment alleging a misuse of market power.

ALAN JONES:

But Bruce if that enforcement action is in the courts, it has really got them terrified hasn’t it? They are really scared because they keep doing it.

MINISTER BILLSON:

Well the matter has not been concluded yet Alan and it would be wrong of me to pre-judge the court’s decision- but certainly the petrol companies and the information sharing service involved strongly rejects the claim that what they are doing is unlawful.

So that is one part of action.

Secondly we have had the shopper dockets dealt with through the courts and other enforcement process which were seeing really quite a deal of harm incurred on motorists because under the guise of shopper dockets, margins were actually increasing.

Now that we have ensured, through legal action, that those shopper docket discounts do not exceed the profit margin at the petrol station, we have seen better value for motorists and a billion more litres, Alan, going through independent retailers.

Now the reason why I raise the independent retailers, wherever we see strong, independent petrol retailers, that is what keeps the big guys to account.

We know in certain regional centres where the independents are not there, that some of the price rises between…

ALAN JONES:

But shopper dockets are knocking off the independent. I mean why do two outifts…

MINISTER BILLSON:

That is why we have taken enforcement action against shopper dockets that are excessive in their discount where the discount exceeds the profit margin of efficient retailers.

ALAN JONES:

Bruce, the shopper docket is in breach of the Trade Practices Act, it is exactly the same as these oil companies giving exemptions in New South Wales from ethanol content. They are, Coles and Woolworths are exempt from the provision of the … why should they be exempt from the provisions of the Trade Practices Act to suck up to them with a shopper docket proposal whereby you buy your groceries and you are just deluded into believing, mind you, forty litres you buy and you save what one dollar sixty. Why would you worry about saving one dollar sixty on a shopper docket and then you go and you get ripped off in the supermarket but the independent is the loser.

MINISTER BILLSON:

And that is why action has been taken against the big supermarket companies that were using those shopper dockets…

ALAN JONES:

Abolish the shopper dockets.

MINISTER BILLSON:

Well what we have also got, and if I will keep going on how many things are actually happening. So we have got enforcement action happening around information sharing that we are, we allege advantages the retailers.

Shopper dockets have been dealt with, there is a new direction to the ACCC since the beginning of the year where they are publishing economy wide petrol price details quarterly and we have got deep dives into regions where there are some incredible irregularity in the prices and I can share with you this morning Alan, the next one of those locations is Armidale, Armidale in New South Wales. We are doing work in Armidale because despite all the petrol movements that we have seen and some change in demand out of the United States and also a little bit of movement in the Australian dollar, Armidale seems to be persistently more expensive by about 10 and a half cents a litre for no good reason. No good reason at all so the ACCC is doing a deep dive into those areas.

ALAN JONES:

Mate you have got them, mate, Bruce let me tell you. You have got them terrified. They are absolutely terrified.

MINISTER BILLSON:

I thought that was the storm outside but if you think it is the petrol stations shaking in their boots I am happy to take your advice on that.

ALAN JONES:

They are shaking in their boots mate, they could not care less what you say they keep doing what they want to do, ripping the motorist off.

MINISTER BILLSON:

No, well their behaviour has changed.

Since January with this new direction I have given the ACCC, we have seen a significant closing of the differential between the capital city prices and regional centres.

We know there are a few areas where there is still some peculiarities going on. We know in Darwin where we have announced this deep dive, there has been a remarkable change in the price of fuel in Darwin.

We are also doing the same in Launceston.

Alan, we are having a red hot go and I cannot think of a time when more is being done about petrol in our country. I cannot think of a time.

ALAN JONES:

Get someone in that mountainous bloated bureaucracy in Canberra to just drive down the Pacific Highway…

MINISTER BILLSON:

I will do the Christenson test myself if I get a chance.

ALAN JONES:

Do the Christenson test. Motormouth this morning says, the cheapest unleaded fuel in Sydney 131.9. Now hang on, last Friday the cheapest was 120.4, Monday it is 131.9 but it is still a far cry from the average down the Pacific Highway this morning of 145.9!

MINISTER BILLSON:

Yes, last time I was on the Pacific Highway I did check these figures, the differential had shrunk significantly. I had done some research on areas up and around another part of New South Wales thinking you had seen something on the weekend Alan, around Mittagong or Mossvale, but I had not done the Pacific Highway test, I can pull that data as well.

But what I can say is there are 180 specific locations across this vast continent where we track the petrol prices, we record their movements, we identify where there are significant gaps above the capital city prices and where it is ridiculous we have got a new power to go in hard and work out what the heavens is going on.

ALAN JONES:

And Bruce, they are absolutely terrified of you, they are absolutely terrified.  They are out there laughing like hyenas! They keep doing what they want to do. Can you just hang on because Anthony wants to ask you a question. Anthony, away you go. He is there.

CALLER (ANTHONY):

Yes, good morning Alan. Just wondering about, with all of this bumping the gums together about, you know, collusive activity in big industries and predatory pricing and anti-competitive behaviour.

When does the blow torch going to get applied to the banks about the simultaneous application of ATM fees that came in across the border a number of years ago. Two dollars here, two dollars fifty there - they would all have different cost structures, they would all have different margins depending on which part of the country these ATMs are in. They would all have different servicing but somehow the fees were all the same. It all came in within the first six months of ATM fees being applied and we have never heard boo out of any Government or the ACCC about that issue.

ALAN JONES:

Bruce?

MINISTER BILLSON:

Good observation Anthony. It is a test of my recollection, but I seem to recall when these fees were introduced there were some concern that non metropolitan people might be adversely treated if you apply the pure fee cost recovery model that would hit out in the regional centres harder where the traffic is less and servicing costs can be slightly higher.

But let me check that one out Anthony, I have not had that raised with me for a little while other than when people are using non-bank ATMs.

These are independent ATMs not attached to a banking provider, those fees can be pretty steep and that is why they give you a choice of whether to proceed with the transaction or not – but let us have a look at it Anthony and I will get back to Alan and Paul and that will give Paul something else to think about as he drives past the petrol stations.

ALAN JONES:

Just before you go though, just before you go - what would stop you from taking a taxi, you would not go in by helicopter, you would just take a taxi - the Pacific Highway, and one morning just call into a few of these people. How come you are 126 yesterday and you are 149 today?

MINISTER BILLSON:

Yes, I popped into a couple and asked that question. I must confess, I think I was being driven by a colleague to be honest with you Alan – but we pull those numbers every day and track them to keep an eye on what is going on to see where someone might be profiteering.

The big message I have for your listeners Alan – if you have got a strong independent petrol retailer in your area, get behind them. They are the best antidote for marauding margins from the big petrol companies ….

ALAN JONES:

Well as you know the independents have been knocked out of the ring by Caltex and all of those for Shell who line up with Coles and Woolworths and the poor little coot has no say, but look thank you for talking to us.

We will be back again when next time the motorists are being ripped off and I just hope there are a few people out there worried as a result of what you have said Bruce but I suspect they are not.

MINISTER BILLSON:

Yes Alan, and Paul can give me a lift.

ALAN JONES:

Ok thank you for your time.