SEPTEMBER 7 2019 LISTENER 13
C
H
R
IS(^) S
LA
N
E
he was transport minister. Former energy minister
Judith Collins also encountered mulish non-co-
operation by some in the sector when she tried to
elucidate their true margins in 2016. The now-
toothier commerce legislation means compulsory
data supply.
The largest cost determinant for petrol remains
the crude oil price, which, combined with our
buffeted currency, is an arbitrary expense we’re
stuck with. Taxes are the next biggest price-booster,
but this Government is rhino-hide impervious to
calls to trim those. Unabashed at using petrol taxes
to fund infrastructure, and keen to get petrol use
down overall, it has just admitted it even investi-
gated banning petrol-driven-car imports from 2030.
RETAIL THERAPY
This leaves the retail sector from which to extract
consumer savings, and that’s innately populist.
These retailers’ doomsday clock is already ticking,
given the world’s zero-carbon horizons. The
commission has again found they often charge
higher prices than are justified. They also engage
heavily in discounting – though less, “Yay, a
bargain!” discounting than, “Yay, no overcharging
for a change!” discounting. Overseas market
authorities, including in Australia and the UK, have
cracked down on fuel-discount schemes, as they
can game consumers while handily
masking profiteering. The discount,
typically generated here through a
grocery retailer, is often not a true
discount, but something closer to
the real price of the petrol. It’s the
“everyday” petrol price that’s padded,
and those not racking up points
via a supermarket scheme are being
“fleeced”.
To be fair, this carry-on is endemic.
When power company Meridian
fessed up, scrapping and apologising
for its early-payment “discount” – in
reality a way to load higher charges
onto customers who struggled to
pay on time – others in the industry
were quite snakey about its virtue
signalling. To call out the illusion of
the bargain is to strip retailers of a
precious tool. Some have the eternal
“sale” – Hurry, must end Sunday! – as
their entire business model.
With its petrol-price mission, the
Government is about to disturb
ancient lay lines of privilege. It’s a
righteous crusade. Price padding
hurts our productivity, export
competitiveness and the cost of
living.
But petrol companies will resist
- Lord knows, they stared down
“Crusher” Collins – and if Ardern
can’t point to lower prices between
now and the next election, she’ll have
invoked a new wave of business non-
confidence for no net political gain.
Governments are frustratingly
short of remedies for uncompetitive
sectors, but let’s hope the Commerce
Commission and a crowbar do
the trick. If not, we risk ministers
inaugurating the supermarket or
petrol or building-products version of
KiwiBuild. We simply haven’t enough
gum trees for that. l
It’ll be a confronting
new benchmark instate intervention
in private business –setting sharp corporate
teeth on edge.