‘Outraged’: Surprise ‘no-profit’ govt servos to drive fuel prices down
A surprise move to drive fuel prices down by setting up ‘no-profit’ govt-owned service stations and price control will spread if successful with industry bracing for fallout.
The Australian Labor Party’s Queensland arm has revealed a trial via Premier Steven Miles to open a dozen government-owned service stations if re-elected operating on a cost recovery basis rather than profit – a plan that could spread into other states and usher in a new era in price control.
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The Queensland government plans to own and run 12 service stations in a trial to drive down fuel prices for consumers.
The trial – which has been met with “outrage” by the Motor Trades Association of Queensland and watched closely by those in other states – will see the full force of the government applied to fast track state-led competition.
“We don’t control global oil prices and we can’t force privately owned petrol retailers to charge less at the bowser, but a government I lead will do whatever we can to bring petrol prices down,” Mr Miles said.
“Currently when you fuel up your car, you’re sending money offshore to big multinationals. Publicly owned fuel stations will charge a fair price for fuel, increase competition, and ensure Queenslanders have more choice when it comes to filling up.”
State treasurer Cameron Dick (left) and Premier Steven Miles (right) will trial a plan to take on fuel giants – a move that could spread if successful. Picture: Lyndon Mechielsen/Courier Mail
Queensland alone has about 16,000 automotive businesses generating over $7.24bn to the economy annually, with the industry estimated at $37bn nationally.
The state plan is to set up 12 fuel stations owned by Energy Queensland running on a no-profit, cost recovery basis. Petrol firms including global giants will also be banned from increasing fuel prices more than once a day, forced to release any plan to raise prices a day in advance, with increases capped at 5 cents a litre daily.
This fuel station in Moorooka sold for $7.1m in October last year.
Around 16 Queensland service stations are currently listed for sale on realcommercial.com.au, with MTA Queensland CEO Rod Camm warning the move could see independents exit the market.
“Our service station members have every right to feel outraged at this proposal,” he said.
“The Government is funding the introduction of competitors to the market, without any consultation from the businesses who will be most impacted.”
“Depending on the location of these publicly owned fuel stations, smaller retailers in the area may face challenges competing with the Government’s ‘no-profit’ pricing, potentially forcing them out of the market.”
This service station in Belgian Gardens last sold in November 2020 for $1.8m.
“Taxpayers will end up covering the operational costs if these service stations run at a loss, like many independent retailers do. This is a bizarre move from the Government and raises several questions about long-term sustainability and fiscal responsibility.”
He said since 2018 fuel retailers have been required to report fuel price changes as part of Queensland’s reporting scheme, warning price caps could jeopardise these business and drive a higher average price for consumers.
