Fuel firms face grilling

WELLINGTON - Deputy Prime Minister Jim Anderton intends talking to petrol companies about their pricing policies.

Mr Anderton told Parliament yesterday that he was concerned that this week's 5c increase had come so soon after the May 4 increase of 4c.

Together, they had wiped out the gains from the last five decreases in petrol prices.

"That is why I have instructed my ministry officials to closely monitor developments in petrol prices, especially with regard to regional differences," he said.

"It seems to be that companies increase prices in much larger jumps than they decrease them."

Petrol companies have blamed the jumps on the rising cost of crude oil, but Mr Anderton is not convinced.

"I am concerned that we get real competition in the petrol market and that is why I will be talking to petrol companies, including those in competition with the large players, over the next few weeks to discuss these issues."

The big four petrol companies seemed to raise their prices at the same time and by the same amount, he said.

"They also seem to have the same regional price differentials, especially in places like Tauranga, where petrol is strangely very cheap.

"If there was true competition at work in the petrol industry, then these simultaneous petrol price movements would mean that all companies must have exactly the same overheads and costs structures, or otherwise at least one of them would be competing on price."

It seemed that wherever there was a Gull petrol station, prices were 5c to 6c cheaper on average, said Mr Anderton.

"Either this is predatory pricing to destroy competition from Gull, or the four main petrol companies are charging the rest of the country higher prices than they need to."

- NZPA