‘Taking advantage’: ACCC investigates fuel surcharges as diesel prices surge despite government excise cut relief
Concerns about price gouging are intensifying as the fuel crisis continues to ripple through the economy, with the consumer watchdog keeping a close eye on businesses including cafes and restaurants and introducing “fuel surcharges”.
The global fuel shock sparked by the Iran war has reignited accusations of price gouging across Australia as motorists and businesses face extreme price fluctuations, supply shortages and uneven relief at the bowser.
As of mid-April, the average price of regular unleaded fuel in Sydney was 218.3 cents per litre, while the average for diesel was 318.1 cents; This underlined the widening gap between the gasoline discount and the diesel charge.
The ACCC is monitoring this situation closely and warns that the government’s fuel duty cuts are reflected in petrol prices, while the diesel discount has largely disappeared due to increased international benchmarking costs.
Its latest weekly report revealed that petrol prices in major cities fell in line with the 32 cents per liter consumption tax cut introduced by the federal government, but diesel prices fell only marginally due to global supply pressures.
The uneven relief has intensified scrutiny of pricing behavior at the retail level, with regulators warning that some operators could benefit from volatility.
In the hospitality industry, cafes and restaurants are also starting to add a “fuel surcharge” to their costs, some ranging from 1 percent to 5 percent.
Australian Restaurant and Cafe Association chief executive Wes Lambert has previously called on businesses to consider introducing a temporary surcharge to offset rising costs.
“Fuel touches everything in the hospitality industry, every delivery, every supplier, every ingredient and every collection truck that pulls into the back of a venue,” Mr Lambert said.
“If the government does not stabilize costs, businesses should be allowed to recover from these difficulties.”
He said the surcharge could help operators survive despite costs they “cannot control.”
John Hart, chief executive of Restaurant and Catering Australia, criticized the idea of a lump sum surcharge and warned it could raise competition concerns.
“I think any attempt to fix prices or surcharges between a group of operators and/or a union could be considered anti-competitive,” Mr Hart told news.com.au.
Mr Hart warned the ACCC would be paying close attention to any coordinated pricing behavior, with the watchdog already scrutinizing fuel-related surcharges.
On 2 April the ACCC issued evidence notices to many regional and remote businesses regarding the use of large fuel taxes and surcharges.
The watchdog said it was aware that some cafes and restaurants were adding “fuel surcharges” without adequate notice to consumers and warned businesses not to falsely attribute excessive price rises to rising fuel costs, even if operating expenses have actually increased.
“While many business costs have indeed increased, the ACCC reminds businesses not to take advantage of excessive price increases by claiming they are due to rising fuel costs,” the ACCC said in its latest report.
“The ACCC is also aware that some cafes and restaurants impose ‘fuel surcharges’ on food and drink without prior or adequate notice to consumers,” he said.
“We will not hesitate to take action if businesses are taking advantage of the current situation to engage in behavior that breaches competition or consumer protection laws.”
In the wider fuel market, the ACCC has warned fuel wholesalers and retailers that they “will not hesitate to take appropriate enforcement action” against false or misleading claims about the passing on of fuel excise tax savings to consumers.
With the excise tax cut due to expire on June 30 and global oil markets still volatile, economists are warning Australians could face further price shocks unless international conditions stabilize or domestic intervention is extended.
