Immediately before the last election, Chris Bowen, now Minister for Competition Policy and Consumer Affairs and Assistant Treasurer, criticised the Howard government over high petrol prices. Families apparently were under pressure because petrol was ''getting out of hand''.
Labor's solution was to appoint a national petrol commissioner who would monitor and investigate petrol gouging and collusion. Never mind that no evidence of gouging or collusion has ever stood up in court, despite years of harassment by the Australian Competition and Consumer Commission of the oil industry.
In the past week the Rudd government made good on its promise, and not too soon. Between November and January, average petrol prices in Australian capital cities rose by 7.8 cents.
The commissioner, Patrick Walker, is highly experienced in the area, having been commissioner for consumer protection and prices commissioner in Western Australia for nearly 10 years. He was the architect of Western Australia's Fuelwatch service. No doubt it is this experience that led him to play down expectations of petrol price relief or savings by saying decreases of between 15 cents and 20 cents a litre were unrealistic.
The WA government set up Fuelwatch, which has monitored fuel prices since January 2001. At its website, Fuelwatch describes itself as being ''single-minded'', having been responsible for a rule whereby petrol prices cannot change in a 24-hour period, and also as having ''empowered motorists to save money''.
Walker claims Fuelwatch reduced unleaded petrol prices in Perth from one of the dearest across capital cities ''to the cheapest''. Unfortunately for Walker, and Fuelwatch, the facts do not support these statements. Data collected by the Australian Automobile Association shows Fuelwatch failed to have any significant effect on unleaded petrol prices, relative to price movements in other capital cities.
A plot of average monthly WA unleaded petrol prices from January 1999 to January 2008 shows very little difference in the average monthly price for all capitals. The correlation between the two price series is more than 99 per cent. There is also no marked difference before and after January 2001, when Fuelwatch began operations. Also, the average unleaded WA petrol price was lower than the average for all capitals in only 42 of 85 months -- 49.4 per cent of the time.
Averages can hide all sorts of variation. But the picture doesn't get any better if we consider the total price rise since Fuelwatch began its work. Since January 2001, the average unleaded petrol price in Perth has risen from 84.9 cents a litre to 138.9 cents a litre, in total 54 cents a litre. That is the second highest price rise across all capitals (Brisbane being the highest at 55.4 cents). But Brisbane still has cheaper average unleaded petrol prices than does WA, so it is not clear whether Fuelwatch has delivered cheaper fuel relative to the other states and territories.
If the Rudd government is serious about this appointment and wishes to be accountable for its election promises, it needs to set benchmarks and targets for petrol price savings. It seems the petrol commissioner is simply another symbolic gesture.
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