Fuel Industry Amendment BillLast updated: January 23, 2023
Fuel Industry Amendment Bill
Published: January 23, 2023
Submitting To: The Economic Development, Science and Innovation Select Committee
Issue for Business: The Bill is amended in two consequential ways. First, it gives the Commerce Commission the power to investigate competition within New Zealand's fuel industry, and subsequently recommend introducing price regulations. Second, it gives the Minister the ability to impose price regulations, that could be the same as, or different to, the Commission's recommendations. BEC is strongly opposed to the amendment to Bill. To start with, BEC believes that there is inadequate evidence to demonstrate uncompetitive behavior on behalf of fuel suppliers. The amendment gives the power of price controls. BEC is opposed to implementing price controls. BEC's submission outlines the vast negative and unintended consequences that often arise from price controls. The Bill lacks any cost and benefit analysis, including no terms of reference. BEC is concerned that the price of fuel risks being set by political pressures, rather than more efficient market forces. The Bill will likely worsen competition, as artificially lower prices do not send a signal to potential competitors to enter the market. Price ceilings increase demand, and in this case is contradictory to New Zealand's aspirations of reducing fuel consumption, and meeting the climate target of net-zero by 2050.
Outcome: Ongoing. The Bill still sits in the Select Committee.