The Victorian Government’s newly-proposed Fair Fuel Plan has sparked concerns from the Victorian Automotive Chamber of Commerce (VACC).
Announced yesterday at Victoria University’s Werribee campus by the State Government, as it looks to curb rising fuel prices in the midst of the country’s cost-of-living crisis, the new Fair Fuel Plan will implement a ‘cap and lock’ mechanism onto fuel retailers.
Under the Fair Fuel Plan’s cap and lock regulation, fuel companies will be required to publicly report their fuel price changes the day before they are in effect, and lock in those prices for 24 hours.
This data will be made available to Victorians through a new ‘fuel finder’ feature on the Service Victorian app, giving them the opportunity to shop around for the best fuel deal.
The plan’s surrounding legislature including an enforcement structure and penalties for fuel retailers is currently in the works, but is expected to be gradually phased into effect over the course of 2025.
Victorian Premier, Jacinta Allan, said commuters would be better informed to make purchasing decisions by knowing tomorrow’s fuel price at every single retailer on their way to to work.
“We know this won’t change everything for families who are doing it tough, but these savings can add up to hundreds of dollars a year,” she said.
Additionally, Minister for Consumer Affairs, Nick Staikos, emphasised the plan’s goal of keeping fuel retailers transparent in their pricing methods by “keeping multinational fuel companies transparent about the prices they set and the deals they promote.”
“We want to give families more power at the bowser,” he said.
Only hours after the State Government’s Fair Fuel Plan announcement, the VACC posted an official response, which called for comprehensive industry consultation and a careful consideration of potential market impacts.
The VACC’s concerns revolved around the Fair Fuel Plan’s possible disruption of fuel pricing, which is determined through complex analysis methods, a myriad of other influential factors and current local market conditions, and needs to be implemented in tandem with industry leaders.
These concerns were further explained in the response by VACC CEO, Geoff Gwilym.
“The VACC appreciates the cost of living pressures experienced by Victorians,” he said.
“However, we’re surprised to see such substantial regulatory changes announced without any prior consultation. While the intention to help consumers is admirable, we are concerned that mandating 24-hour price locks could actually remove the natural fuel cycles that often benefit consumers and potentially lead to greater price fluctuations as retailers try to manage their risk.
“This is particularly concerning for smaller, independent operators who operate on razor-thin margins.”
In addition to the plan’s potential pressure on fuel retailers, other industries reliant on constant fuel supply could stand to be severely affected by price disruptions or even fuel availability.
The transport sector, composed of commercial truck fleets all across the country, are integral to Australia’s supply chain and are supplied with diesel by service stations.
These fleets require consistent fuel to complete their journeys and deliver essential goods to consumers and companies.
While acknowledging the good will of the Fair Fuel Plan, Gwilym further elaborated on its potential adverse effects on small businesses in different industries.
“The proposed regulations, while well-intentioned, could have significant operational impacts on small business operators,” he said.
“For example, the requirement to lock in prices 24 hours in advance doesn’t account for sudden changes in wholesale prices, which could put considerable pressure on smaller operators who lack the financial reserves of major fuel companies.”
Gwilym and the VACC are eager to collaborate with the Victorian Government to make these new reforms viable for consumers and businesses alike.