Nicola Willis orders watchdog to monitor petrol prices after Iran conflict

Finance Minister Nicola Willis has asked the Commerce Commission to keep an eye on petrol companies following the spike in oil prices because of the ongoing conflict in Iran.

The move comes as the commission warns fuel companies not to act in a misleading or deceptive manner.

At the Government’s weekly post-Cabinet press briefing, Willis confirmed the Government has set up a ministerial oversight committee to manage the incoming economic shock that the country faces.

“We have a national fuel plan in place, and government agencies have activated work with fuel companies, distributors and retailers to co-ordinate our response,” Willis said.

Willis also confirmed New Zealand currently has 28 days of petrol, diesel and jet fuel on hand, with a further 29 days of fuel en route.

Despite the threat of an incoming economic shock, Willis confirmed she is not currently considering reducing the fuel tax as fuel prices across the country rise.

However, she has asked the Commerce Commission to monitor the conduct of petrol companies.

Commerce Commission head of fuel and dairy Louise Stephenson said the commission regularly tracks fuel prices to monitor the levels of competition in the fuel market.

The Ministry of Business, Innovation and Employment (MBIE) carries out weekly monitoring of national average prices and retail importer margins for regular petrol, premium petrol, and diesel.

“International conflicts can impact fuel prices in New Zealand, but we would expect that any retail price increases are aligned with actual increases in the cost of sourcing fuel,” Stephenson said.

“High prices and price increases in and of themselves are not illegal under the Fair Trading Act. However, the law prohibits misleading and deceptive conduct, and false representations.”

Stephenson said the commission would be concerned if a business was found to have misled customers about the reason for a price increase, and said anyone who believes a business has breached a law it enforces should report their concerns.

“We will continue to monitor prices and call out any behaviour that we believe impacts the ability of Kiwis to get a fair deal at the pump.”

A spokesperson for the commission also said that it does not typically engage in short-term investigations into company conduct, particularly for price increases that are not explicitly illegal.

The spokesperson did raise concerns regarding “rocket/feather” tactics, in which prices rise rapidly, but take longer to return to normal.

The spokesperson said the commission would be monitoring to ensure prices fall “just as fast as they rose”.

Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.