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House of Assembly - Fifty-Third Parliament, First Session (53-1)
2014-11-13 Daily Xml
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Petrol Pricing

Mr HUGHES (Giles) (15:26): I rise today to speak about two issues in my electorate, the first of which is that perennial bugbear, the price of petrol and especially the difference in price between the metropolitan area and many regional communities. It has been a source of legitimate complaint over the years. A number of organisations, including the RAA, have stated that the degree of difference in price is not justified and I know that many people in my electorate feel they are being ripped off and that in areas such as Whyalla there is virtually no competition.

Average weekly prices in Whyalla during a 40-week period ending in August 2014, saw petrol prices move roughly within a range of $1.54 to $1.56 a litre and there was barely any difference between the service stations when it came to price. The situation in Port Lincoln was even worse when it came to elevated prices. Port Augusta has experienced a drop in prices over the last few months and is now significantly cheaper than Whyalla and Port Lincoln.

Petrol prices in many regional communities will rarely match what is found in the metropolitan area and there are understandable reasons for that. One factor is transport costs, with some estimates suggesting that the transport of fuel to Whyalla adds up to 4¢ a litre to cost, with more distant communities hit even harder. The metropolitan area clearly has a much larger market, more competition and a cycle of fuel discounting. Regional service stations often have lower sales volumes but similar fixed costs. The competitive strategies of large nationally owned outlets also has a greater impact on price in the metropolitan area.

So, there are legitimate reasons for the price differential but the issue for a number of regional communities is the degree of price difference and whether that degree is justified. I know the people who I speak to feel ripped off and I know that a number of credible organisations have stated that petrol prices in a number of regional centres are too high and cannot be justified. On behalf of consumers in regional centres, I think it is time that we had a close look at the factors that are at work.

The other matter I want to raise is the impact of electricity prices. It is another area of serious concern and it is especially concerning for people who are getting by on low incomes. Recent figures indicating a doubling, over a four-year period, of the number of households that have had their electricity cut off is a real wake-up call. Over 10,000 households cut off in South Australia is not acceptable. It has been estimated that the privatisation of electricity assets in South Australia has added up to $2 billion to our electricity bills.

It is surely time that the regulatory framework governing the operation of the electricity market is reviewed and seriously reformed. As a basic service, electricity should be affordable, reliable and clean, and it should be affordable for all South Australians. It is the interests of consumers and the environment that should be put at the centre of the regulatory framework, not the interests of energy incumbents, which is not to say that there should not be a reasonable return on essentially monopoly assets; the return at the moment is not reasonable.

Any review should take into account the rapid growth of distributed generation and, on its heels, storage, and the real potential of emerging technologies to put power back into the hands of consumers. Should we be looking at an orderly shift from the traditional 'hub and spoke' approach to electricity to a more flexible distributed approach to generation and supply?

Average household savings due to the installation of rooftop solar is approximately 60 per cent. Regional South Australia has embraced rooftop solar: in the member for Stuart's community, where he lives in Wilmington, 23 per cent penetration; Port August, 26 per cent; Port Lincoln and surrounding areas, 22 per cent; and, in my community of Whyalla, over 37 per cent . We need to ensure that low-income households in the public and private rental markets do not miss out on the benefits that solar can offer.

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