The Commerce Commission’s decision to allow Z Energy to buy Caltex can only undermine the competition in the fuel industry that is needed to ensure New Zealanders pay the lowest price for petrol, Labour’s Consumer Affairs spokesperson David Shearer says.
“This is an essential industry and needs the greatest amount of competition possible, not have it reduced. Sadly, petrol is going the same way as a number of other essential industries, meaning New Zealanders are typically paying higher prices for goods here than they would in Australia.
“The Commerce Commission has allowed just two supermarket companies to dominate New Zealand’s grocery industry, while just two major construction supply companies have cornered the market for building materials.
“While it is some comfort that Z Energy is a New Zealand-owned company, it now owns around 50 per cent of all petrol outlets. Observers have noted it has consistently raised its prices earlier than its competitors.
“What's more, this decision undermines the Commerce Commission’s own guidelines which highlight industry dominance of over 40 per cent as a red flag.
“When making its decision, the Commission itself was divided, with one commissioner dissenting from the majority – perhaps for good reason. It highlighted that fewer companies meant it was easier to ‘coordinate’ prices to the benefit of the companies, rather than customers.
“There has been concern in recent months that when oil prices have dropped, companies have been slow to pass those savings on to customers and – with the exception of Gull – have operated as a pack.
“New Zealanders should expect our consumer watch dog to look out for their interests in an independent, fearless way – not do the industry’s bidding in a way that limits competition, favours those left in the market and disadvantages middle New Zealand,” David Shearer says.