Legal basis for the legislation
The Australian government imposed price controls on petrol from
1939 to 1948. From the 1970s to 1990s a variety of authorities regulated petrol
After prices were deregulated in 1998 the ACCC was tasked with monitoring
petrol prices and has conducted a number of inquiries, the most recent
reporting in December 2007.
Section 51(xx) gives the Australian government power to legislate
with respect to 'foreign corporations and trading or financial corporations
formed within the limits of the Commonwealth'. Some small petrol retailers are
not corporations, which has led to some speculation that the proposed national
legislation may not be constitutional.
However, Treasury has reported that they had 'taken advice from
the appropriate authorities that the bill is constitutional'.
The advice from the Australian Government Solicitor in preparing
the legislation is that the corporations power is not restricted to laws
addressed to constitutional corporations. It also supports laws addressed to
noncorporations insofar as a constitutional corporation acts through them—that
is your example of a partnership structure at the retail level—or where a
noncorporation’s conduct is, or is capable of, affecting a constitutional
corporation’s activities, functions or business.
All state and territory governments have legislation under which
petrol prices could be regulated.
Definition of 'standard price' in the bill
Caltex asks whether the requirement in the bill that petrol be
only sold at the 'standard price' notified to the ACCC the previous day (which
the bill states should disregard shopper dockets) would make it illegal for
stations to offer a lower price to customers with shopper dockets or loyalty
Shopper dockets are still offered in WA under FuelWatch, but the WA legislation
uses different wording. A case can be made that it would be a good thing to
remove shopper dockets from the market (Chapter 4), but it would appear that
this is not intended. The Law Council did not consider that the bill would
prevent the use of shopper dockets.
Similarly, the Motor Trades Association of Queensland were
concerned about possible confusion arising from the treatment of the 8.4 cents
per litre subsidy provided by the Queensland Government. Service stations:
... currently display a price net of the 8.4c discount provided by
the state subsidy. Under Fuelwatch, we understand that the intention is that
gross prices would have to be shown.
...as drafted, section 10(2) is too prescriptive in that it
imposes a positive obligation to sell fuel (even where we may have none for
sale due, say, to a stock out). This is quite distinct from an obligation, if
an offer to sell is made, to sell at the notified price. The WA legislation
makes it clear that it is only if a retailer offers fuel for sale that they
must sell it at the notified price.
The Australian Institute of Petroleum commented:
AIP also notes that civil penalties will apply where retailers notify
a price for the 24 hour period, but do not sell fuel at the notified retail
price. There is no explanation in the legislative package of what this means in
the context of ‘stockouts’ of fuel at service station sites running out of fuel
and what evidence will be required to satisfy inspectors that there is no
The committee recommends that the Government examine the wording
used in regard to 'standard prices' in the bill, and if there is a risk of
ambiguity, adopt the wording that has been used in the Western Australian legislation
The Law Council advocated a three-year sunset provision, whereby
Fuelwatch would lapse unless specifically renewed following a review.
There have been calls for the Fuelwatch scheme to be reviewed
after it has operated for some time:
...there should really be a mechanism in place for appropriate
evaluation. We have recommended in our submission that that should be 12
...the current proposed Fuelwatch scheme is best viewed as a work
in progress and that we should leave room open for it to be tweaked, reformed
drastically, or what have you, as we learn more.
...the NRMA recommends that once introduced, the Government
undertake a thorough public review of Fuelwatch after 12 months...
The Explanatory Memorandum states that 'the Government will
review the effectiveness of the scheme 12 months after its commencement'.
The committee recommends that the designated review of the scheme
after twelve months be undertaken in an open and transparent manner by an
Navigation: Previous Page | Contents | Next Page