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“Fleecer in Chief”

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Jacinda Ardern says New Zealanders are being ripped off over petrol .

Stuff reports

A landmark report into the fuel industry by the country’s competition watchdog shows New Zealanders are being “fleeced at the pump“, Prime Minister Jacinda Ardern says.

The draft report into the $10 billion fuel industry stated that petrol companies appeared to have made “excess returns” for most of the past 10 years, with profits “persistently above the returns earned by comparable firms internationally”. 

Commerce Commission chairman Anna Rawlings said earlier that fleeced was “not a term that we use”. But she said the commission’s current view was that the fuel market was not as competitive as it could be and the core problem was the lack of an “active wholesale” market for fuel. 

“Our preliminary findings suggest that many fuel companies are earning returns on investment that are higher than what we would consider a reasonable return to be,” she said.

Z Energy shares had fallen by more than 3 per cent in mid-afternoon trading to $6.39 in the wake of the report and the Prime Minister’s comments.

Z chief executive Mike Bennetts said it did not believe its returns were unreasonable “given the level of investment we make and the risks Z incurs across our operations”. 

The commission has set out proposals for how the wholesale market could be improved, which it believes could flow through to cheaper prices at the pumps.​

These centre on changes that would make it easier for independent petrol retailers to source fuel from oil terminal owners Z, BP, Mobil and minor-player Gull on better terms. 

Either law changes or a negotiated deal with oil companies appear possible. Bennetts said Z agreed with the commission that terminal arrangements “required updating”.

“We look forward to working with the commission on a model that’s fit for purpose today and tomorrow,” he said.

Ardern responded fiercely to the draft report’s findings.  

“Now the Commerce Commission is going to finish its report. It is likely then they will give us a steer on what happens next, but I can tell New Zealanders we cannot stand by while they are facing that pressure at the pump and being fleeced.” 

The Government instructed the competition watchdog to look into the fuel market in December on the back of concerns that petrol prices had got less competitive and that large variations had emerged in the price of fuel around the country.

The commission is due to finalise recommendations from its 424-page draft report on December 5, after which it could be back to the Government to decide whether to take action.

Concerns about competition in the fuel market increased after 2016, when the commission approved the acquisition of Caltex NZ’s business by Z Energy in a non-unanimous ruling that sent Z’s share price sharply higher.

Rawlings said Z Energy, Mobil and BP controlled 90 per cent of the country’s petrol and diesel supply giving them “a significant advantage over any other potential rival importers, as their costs to deliver fuel are lower”.

“Not only have other fuel importers been unable to access the wholesale market, but the majors themselves have limited incentive to compete with each other during the terms of their supply contracts. As a result, competitive pressure does not appear to be driving down wholesale prices in New Zealand,” Rawlings said.

If the wholesale market could be made more competitive, the commission would expect prices at the pump to come down, she said. However, the commission has declined to guess by how much. 

The commission said it was considering “two broad sets of options” to create a more competitive wholesale market for fuel.

Nothing about the excessive fuel taxes we are paying.

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23 COMMENTS

  1. Don’t mind paying the taxes if it was spent on roads that need to be fixed and not on bloody cycleway s and all the other waste money projects.
    There is hope. Jones has got control of this now and desp[ite what is said about him I think he is on the right track. Twyford is sidelined as he should be.

    https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12260354
    Have a read. This is the right path.

    Just got to rid ourselves of the RMA which stops everything in its tracks and costs millions to get around.

    Tauranga has a major disaster looming because of the RMA and the ability to stop a major facility. Can’t say more but the resultant cost and chaos will bring development to its knees.

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  2. The 400 page report did not say how much per litre it thinks we are over paying.
    Is it 1 cent, or 5 cents, 1o or 20?
    And then once we knew that, if the price did drop, it would be hidden by all the regional variations and discounts.
    And any drop would also be replaced by extra taxes and the variations in our dollar.

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  3. Yes I am annoyed at the constant push for bus lanes and cycle lanes in our cities.
    (Rural tourist cycelways are OK.)
    They cost a fortune, and make it harder for cars to maneuver and cause xtra traffic jams.
    And no one is using the buses or the cycle lanes.
    Not only that but they kill the businesses on those roads.

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  4. Don’t be fooled for one moment that this is actually about Arderns concern for petrol costs. The government takes over 50% of the cost in taxes and she hasn’t even hinted at reducing that.

    This is about the fact that Ardern, as leader of the NZ Labour Party, is a rape enabler who is deflecting to avoid any scrutiny over her hiding a nasty piece of work who enjoys using his position to take advantage of women and happens to who works in her office. And that she has trampled over 30+ years of ToW settlement process convention with her gormless meddling with the illegal occupation in Mangere.

    She is dishonest and incompetent and should resign.

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  5. This is the interim report. The finished article won’t be out till December. Apparently Jacinda and co will be doing nothing until then. Why does it take so long to finish a report when we already know what it says and why isn’t the government taking action now? Does Jacinda enjoy watching us being “fleeced”? This is just another smoke screen.

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  6. Stupid, Dishonest, Ignorant, Evasive, Disingenuous, Calculating, Immoral, Underhand. I have left any out? And No, I am not talking about that other misfit in parliament that I despise with a passion who wants Bennet’s Head…. How Jacinda gets away with what she does is beyond me.

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    • How Jacinda gets away with what she does is beyond me.

      To the Left, the end justify the means.

      I suspect Jacinda could behead Simon Bridges on the steps of parliament and we’ll have the media tell us how Simon Bridges befouled Jacinda’s knife, how he has a history of depression and it’s Jacinda’s kindness that saved him. There will be increasingly convoluted tales told from the Stephieboys of the world as to why this is justified because Robert Muldoon farted too loud when he was a baby.

      There is no accountability on the left. Only victory. How they get there, doesn’t matter to them.

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  7. Those pricks at the Commerce Commission need to be shot with a ball of their own shit. They are the ones that allowed Z Energy to take over Caltex. Bit rich them now blowing on about the lack of competition in the industry.

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  8. Very clear to me an ongoing and increasing issue is the excise on fuel demanded from road users at the pump.

    We are insulted when part of the justification is “the previous government did it too”. Yes, they did but they spent it on roads, not waffling “safety improvements” but actual roads.

    I am cheated as an excise payer on fuel when that funding is taken for non roading purposes and wilfully so by an ideological government. It is an integrity issue and for me, on that basis, the present government gets a fail.

    The Commerce Commission is not adding value at present. They will hold their posts but the result of their deliberations is not facing the same reality a road user faces each time they fill the tank. The fuel excise is the issue as is the improper use of it.

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  9. ‘A Landmark report’. Cindy cannot blame the fuel companies for making money in a tough market. NZ is but a pimple in the world use of fuel and it may become just too much trouble for the petrol companies to supply our tiny islands at the bottom of the world if Cindy complains about their right to charge for their importing and supply services. Dropping tax is unimaginable for a Labour govt who hand our taxes over to all and sundry without accountability or improvements for the actual tax payers. She cannot increase taxes either as we already pay over the odds and don’t see any improvement in traffic congestion or new roads to drive on. The results of the ‘Landmark report’ will be kicked down the road like all the other cans so she doesn’t have to make any decisions.

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