The Commerce Commission is taking legal action against Mobil New Zealand’s head office over alleged lack of transparency in its pricing methods.
The Commission has filed proceedings in the High Court, alleging two ongoing breaches of section 16(1)(a) of the Fuel Industry Act 2020, one starting in November 2021, and the other in August 2022.
“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,” Commissioner Bryan Chapple said.
He said a “lack of transparent wholesale prices means that independent petrol stations aren’t able to see and question the rates that Mobil is charging them”.
“The flow on effect is that Mobil head office is able to increase prices with minimal pushback, putting pressure on retail prices set by petrol stations,” Chapple added.
One of the ways the fuel market in New Zealand operated was through large international companies, such as Mobil, importing fuel and selling it at wholesale to independent dealers who own and operate petrol stations.
Many of the dealer owned petrol stations use the branding of larger companies, such as Mobil, but are run independently.
“A lack of pricing transparency for dealers makes it harder for them to offer the best prices for their customers,” 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.”
The maximum penalty under the act is $5 million per breach.
Mobil to ‘defend our business’
A Mobil spokesperson said it acknowledged the Commerce Commission’s action but was “disappointed” and vowed the company would “defend our business and the integrity of our pricing practices”.
Mobil said the matter did not relate to competition law or any alleged anti-competitive behaviour.
“It concerns only whether an element of our wholesale contracts meets the transparency requirements under the Fuel Industry Act and associated regulations.
“We have cooperated fully throughout the investigation and continue to comply with all obligations under the Fuel Industry Act and Regulations.”
The spokesperson said the company had also introduced an alternative pricing method, available to all new and re-contracting dealers, to provide them with “greater choice”.
“We have informed dealers under existing contracts that they are free to move to the new pricing method whenever they wish.
“Mobil has a long history of serving New Zealand communities and supporting small businesses. We remain focused on delivering reliable, high-quality fuel and supporting our dealer network.”
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