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Petroleum Products

Industry Commission inquiry report

This report was signed on 5 July 1994 and subsequently released by the Commonwealth Government.

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Contents

Preliminaries
Cover, Copyright, Signing Page, Contents, Abbreviations, Glossary, Terms of Reference

PART A

Overview
Areas of concern
Is competition sufficiently strong?
Petroleum product pricing
Price controls are not the answer
Access to oil terminals
Fair dealing within the industry
Improving performance
Legislative reforms
Self regulation
State and local government regulation
Environmental considerations
Transport issues
Taxation issues
Some effects of reform

Findings and recommendations

PART B CHAPTERS

1 Inquiry Issues and Approach
1.1 Scope of the inquiry
1.2 Participants' views of the key issues
1.3 The Commission's approach
1.4 Consultations, submissions and public hearings

2 Australian Petroleum Products Industry
2.1 Refining
2.2 Wholesaling and retailing
2.3 Vertical arrangements

3 Industry Performance
3.1 Use of capital
3.2 Use of labour
3.3 General indications of performance
3.4 Conclusion

4 Assessing Competition
4.1 Views on competition
4.2 Structural features
4.3 Behavioural issues: collusion
4.4 Outcomes observed

5 Country Markets
5.1 Participants' views
5.2 Prices in country markets
5.3 Factors behind country prices
5.4 Policy implications

6 Prices Oversight and Competition
6.1 Price control in petroleum product markets
6.2 PSA surveillance of petroleum products
6.3 The impact of PSA wholesale price regulation
6.4 Hilmer report
6.5 Commission's assessment

7 Terminal Gate Pricing and Access
7.1 Impediments to terminal access - the Laidely Agreement
7.2 Elements of terminal gate pricing
7.3 Conclusion

8 Commonwealth Sites and Franchise Acts
8.1 The Petroleum Retail Marketing Sites Act
8.2 The Petroleum Retail Marketing Franchise Act and Oilcode
8.3 Self regulation

9 Regulation of the Retail Sector
9.1 Objectives of regulation
9.2 Motor Fuel Distribution Act: South Australia
9.3 Town planning controls at a local level
9.4 Locational controls: Australian Capital Territory
9.5 Co-location and restrictions on retail floor space
9.6 Trading hours and restrictions on range of products sold
9.7 Conclusion

10 Environmental Considerations
10.1 Environmental regulation
10.2 Emissions
10.3 Lead emissions from petrol used in motor vehicles
10.4 Contamination of sites from underground storage
10.5 Waste oil

11 Transport
11.1 Road transport
11.2 Rail transport
11.3 Coastal shipping
11.4 Port authority services and activities

12 Temperature Correction
12.1 Background
12.2 Costs and benefits of temperature correction
12.3 The practicalities of switching to temperature correction
12.4 Market responses that mitigate measurement errors
12.5 Is there a need for temperature correction?

13 Taxes and Charges
13.1 Current arrangements
13.2 Road user charges and road funding
13.3 Revenue raising burden on petroleum products
13.4 Rebate arrangements
13.5 State franchise fees

PART C APPENDICES

A Inquiry Procedures

B Vertical Arrangements in the Petroleum Products Industry

C The Access Economics/MTAA Petrol Retailing Model

D Alternative Fuels for Transport

E The Trade Practices Act and the Petroleum Products Industry

F Prices of Petroleum Products in Country Markets

G PSA Price Setting and Ministerial Directions

H Case Studies of Country Prices: Sale and Taree

I History of Price Control and PSA Intervention in Petroleum Products

J Deregulation of the Petroleum Products Industry in New Zealand, UK and USA

K Franchising in Australiav

L Waste Oil Recycling

M Economy-wide Effects of Certain Taxation Arrangements

References

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