The Commerce Commission has initiated legal proceedings against Mobil, accusing the company of violating fuel industry regulations by lacking transparency in how it determines prices for independent petrol stations.
The 2020 law changes mandated fuel companies to reveal their pricing and comply with additional regulations to boost competition in the industry, ensuring fair treatment for both company-owned stations and independent retailers.
Commissioner Bryan Chapple said it is believed Mobil has been violating one rule since November 2021 and a second rule since August 2022.
Each breach has a $5 million maximum penalty.
“We think that the wholesale prices methods Mobil New Zealand’s head office has used to calculate what they charge petrol stations (dealers) aren’t transparent enough to meet their obligations under the Act,” Chapple said.
“The purpose of the Act is to improve competition in the fuel market for the long-term benefit of consumers, and so we take any suspected breaches very seriously.”
He said that because wholesale prices were not transparent, independent petrol stations could not view or challenge the rates that Mobil was charging them.
“The flow-on effect is that the Mobil head office is able to increase prices with minimal pushback, putting pressure on retail prices set by petrol stations.”
Chapple explained that Mobil, along with other foreign-owned fuel suppliers, imports fuel and sells it to independent dealers who operate petrol stations, even though those independent retailers may use the branding of the foreign companies.
He said that the absence of pricing transparency for dealers makes it more difficult for them to offer the best prices to their customers.
Mobil expressed its disappointment in ComCom’s course of action and “will defend our business and the integrity of our pricing practices,” it said in a statement.
The company said the matter was not related to anti-competitive conduct but concerned compliance with transparency obligations.
The company said it has fully cooperated throughout the investigation and continues to meet all requirements under the Fuel Industry Act and Regulations. It has also introduced an alternative pricing approach, which is being made available to all new and renewing dealers.
“We have informed dealers under existing contracts that they are free to move to the new pricing method whenever they wish.”