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May launch for fuel cap in Albany

A FORMULA for capping the retail fuel price capping in regional areas should be available by early May. Albany is mooted to be the first town to have the cap.

Albany service stations also have become the first regional stations forced to display fuel prices on signboards — something they have not been doing.

Consumer Affairs Minister John Kobelke said the WA Government would soon announce the formula used to set a retail price cap in 24 regional centres.

Once the formula has been established by the Ministry of Fair Trading there will be a consultation period to make sure it is workable for both the industry and consumers.

The Government has already introduced a wholesale fuel price cap and is drafting legislation allowing retailers to get up to half of their fuel from alternative suppliers.

However, fuel industry figures are concerned the Government is rushing its price control legislation without receiving proper consultation.

There are also concerns an incorrectly set retail price cap could cause many regional petrol stations to close.

Motor Trade Association executive director Peter Fitzpatrick said the Government should fix its wholesale price capping process before tackling the retail price.

“I don’t think we’re anywhere near where we need to be with the maximum wholesale price,” he said.

Australian Institute of Petroleum executive director Brian Nye said small businesses would feel the brunt of the cap.

“The large oil companies don’t run any regional service stations,” he said.

Shell chief economist Peter Harris said retail price capping inhibited competition.

“You can set the price too high, set it just right — but you need perfect information — or set it too low,” he said. “If the retail price is set too low, regional petrol stations will close.

“The maximum wholesale price has been set too low. It is not sustainable in the long-term and could lead to instability of fuel supply in WA.”

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