The Australian Competition and Consumer Commission (ACCC) has named Darwin as the first regional location being studied under the new petrol monitoring arrangements launched by the Minister for Small Business, Bruce Billson, in December 2014.

The aims of the regional market studies are to get to the bottom of why prices are higher in certain regional locations and to identify and explain each component of the prices paid at the bowser.

ACCC chairman, Rod Sims, said petrol prices in Darwin are among the highest in Australia.

“Annual average retail petrol prices in Darwin in 2013-14 were around 170 cents per litre (cpl), which was almost 20 cents per litre higher than in the five largest capital cities,” Sims said.

“Petrol prices in Darwin are consistently higher than in Katherine, which is far smaller and more than three hours inland. Furthermore the differential between Darwin prices and prices in the five largest capital cities has increased in recent years,” Sims said.

The ACCC will examine petrol markets in at least a further two regional locations by the end of the year, with the next two regional locations to be selected for a market study over the coming months.

“The ACCC receives many complaints from across Australia that petrol prices are too high, and are priced well above cost. Some then argue for some form of ACCC action. However the ACCC has a price monitoring role, not a price setting role, and pricing above cost is not against the law for petrol or any other consumer good,” Sims said.

“Our previous price monitoring work has been done at a macro level, to explain the high level price drivers. Under the new petrol price direction from Minister Billson we are now examining the prices drivers at a local level.”

“We see three potential benefits from these ‘deep dive’ regional market studies. First, simply providing greater transparency will empower. Second, we could make recommendations for change to some tier of government. Third, we may find a breach of the Competition and Consumer Act that was not otherwise apparent.”

Sims said the ACCC was currenty seeking the first round of notices to the major fuel companies in Darwin and further requests for more detailed information will be sent out in coming weeks.