Regulations under a Fuel Industry Bill and other matters

Summary

On 27 February 2020, Government announced its response to the Commerce Commission fuel market study. Government will be introducing changes through a Fuel Industry Bill to promote greater competition in the wholesale and retail fuel markets including:

• a 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; and
• requiring retail fuel sites to display premium fuel prices on forecourt price boards.

Now that Government has made its response, we seek feedback from interested parties on the content of the regulations that will contain important details of the new regime. The consultation document provides information and seeks feedback on a range of questions for development of regulations including feedback on:

• The details of new requirements for a transparent wholesale pricing regime, such as the fuel products covered, the obligations on suppliers for setting and posting prices, and for supplying fuel.
• The details of rules to ensure contracts between wholesale fuel suppliers and their customers are fair and support competition, such as what the maximum length of contract term between suppliers and wholesale customers should be and how much of a wholesale customer’s fuel requirements can be exclusively tied to one supplier.
• Dispute resolution process arrangements for wholesale market disputes.
• Specific requirements for fuel suppliers to display premium prices on forecourt price boards.
• The types of information that industry participants may be required to collect and disclose to monitor the impact of changes.

Additionally, feedback is sought on options for a backstop regulatory regime that will be included in legislation at a later stage. The document seeks feedback on questions including what the threshold and process for triggering a backstop should be, and how price regulation could apply under a backstop.

We have extended the deadline for all feedback to 5pm, 29 May 2020.