Cheaper fuel could be on the way for motorists as the government looks to stimulate competition at the pump.
It is promising legislation by the middle of the year as part of a package aimed at bringing down the wholesale price that smaller companies pay when fuel is first brought into the country.
Today, the government has released details of the Fuel Market Bill, saying there would be consultation with industry players in coming weeks on the proposed regulations.
Energy Minister Megan Woods says this will make it easier for discount operators such as Gull and Waitomo to compete.
The moves are in response to a Commerce Commission study that found lack of competition is allowing some companies to make excessive profit.
Woods emphasised that was further work to be completed longer-term in response to the Commerce Commission recommendations. She said letters from ministers to fuel companies had urged them to take pre-emptive action over the issue.
"The action the government is taking in response to the Commission's report forms a package of solutions to deal with entrenched problems that have been around since the 1980s," Energy Minister Megan Woods said in a statement.
"The Commission's report found that companies were making high profits due to a lack of competition in the industry. The report confirmed our concerns that motorists are paying higher prices for petrol and diesel than could be expected in a competitive market."
She said the government's focus was on making changes at the wholesale level so smaller players such as Waitomo and Gull could gain access to cheaper fuel, forcing other retailers to adjust prices or risk losing customers.
"Cumulatively, the suite of measures we're introducing will mean competition can begin to flourish, and the benefits will filter down to consumers."
Regulatory changes in the Fuel Market Bill currently being drafted include:
- More transparent wholesale pricing regime requiring fuel suppliers to publicly post the prices they sell to wholesale customers at storage terminals
- Rules to ensure contracts between wholesale fuel suppliers and their customers are fair and support competition
- Providing a dispute resolution scheme for the new regime
- Improvements to the monitoring of the fuel market by requiring fuel companies to collect and disclose certain information
- Requiring retail fuel sites to display premium fuel prices on forecourt price boards.
