Petrol reseller market ‘broken’

Energy Minister Megan Woods says she believes the petrol market is “broken” after a meeting with BP executives to discuss its pricing tactics.

Woods instructed BP to come to Wellington for a meeting in the Beehive after being shown an internal email in which a BP pricing manager outlined a plan to hike prices at a number of lower North Island sites in an attempt to protect falling sales at a fourth.

“I remained convinced that what we’re seeing here is an example of a market that isn’t working for consumers. I think we’ve seen an example of some pretty cynical behaviour. I don’t think this is isolated,” Wood said.

“People are quite possibly paying over the odds for petrol when they go to the pump,” Woods said, pointing to an official report which claimed “hundreds of millions of dollars of wealth” could be being transferred from motorists to petrol companies.

“I actually think this is an example of a broken market, a competitive market is one where players can come in freely, and there can be competition and consumer benefit from that.

Woods has written to BP saying directed officials to conduct a preliminary cost-benefit analysis of possible regulator interventions, which may be recommended by a possible, future Commerce Commission market study.