Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

I do thank the honourable member for Bendigo for his question. I can report to the House that overnight the price of the benchmark West Texas Intermediate crude oil rose to a new high of $100.83 a barrel. The price of the benchmark used for Australian petrol purposes, the Singapore Mogas 95, rose to $108.04 a barrel. The basis of this increase was speculation that OPEC, at their meeting on 5 March, will cut production. This development underlines the importance of the government’s approach. We have always said, in opposition and in government, that when world oil prices are so high it is important that there are extra efforts to ensure transparency and competition in the Australian petrol market, to ensure Australian motorists are not paying one cent more than they need to at the bowser.

These increases have an effect on Australian working families. As CommSec has pointed out, the average Australian household is forking out $189.50 a month on petrol, which is up $27 a month on the past year. Just as concerning is the flow-on effect. Every good for sale in an Australian shop has transport as a component of its price. When petrol prices go up the transport component of those prices also goes up. So this has an inflationary effect. It is because of these impacts on working families and because of the impact on inflation that the government have taken the action that we have since the election: the issue of formal monitoring powers to the ACCC and the appointment of Australia’s first petrol commissioner. And that is why we recognise and say very clearly that there is more to do. We will continue to work with the ACCC and the petrol commissioner on the range of measures that the ACCC recommended for further consideration in their petrol report handed to the government in December.

When oil prices are so high it is particularly important that we ensure that there is no undue divergence between the price of oil in Singapore and the price of petrol in Australia. In other words, there will always be a difference between the price of oil in Singapore and the price of petrol in Australia because of production costs, refining costs, transport costs and profit margin. But it is important that the ACCC continues to monitor that divergence and ensures that it is no greater than could be justified by the market. This divergence, the ACCC tells me, is normally in the order of 60c a litre. From time to time the ACCC notices this creeping up. This happened twice in the last two years.

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