Fuel Industry Amendment Bill

Members, when this debate was last interrupted, we were up to the split calls. So—

Tāmati Coffey: I’d like to take it, Madam Speaker.

I call Tāmati Coffey.

Thank you very much, Madam Speaker. Can I say that the work that’s been done on this particular bill is going to help New Zealanders all across the country.

We know that as we’re facing rampant cost of living pressures. New Zealanders are going to the supermarket, they’re going to the gas pumps, and they are hurting in the pocket. So we need to do as much as we can to relieve the pressures that New Zealand families are facing.

By small amendments like what is being suggested in this bill, we’re going to not only help them at the pump to, hopefully, achieve a better and more competitive market when it comes to fuel but also be able to implement some of the recommendations from the Commerce Commission’s market study, which is something which this Government were really passionate about enabling the Commerce Commission to be able to do.

Now, in 2019, they released their fuel market study. They said that the engine fuel companies have been making higher profits than what would be expected in a normally competitive market, and, for that reason, this bill has ended up in the House. The Act is going to include a terminal gate price regime which promotes new entry and expansion by existing players into the wholesale fuel market. The Commerce Commission also recommended the development of a regulatory backstop to the terminal gate price regime, which would be implemented by this bill. Hopefully, the settings are right for us to open up competition in the market so that fuel users, New Zealanders all across the country with their cars, will be able rock up to their local station and be able to get, hopefully, the best possible price.

What we’re doing is trying to create a fair market because the market, we believe, on this side of the House, hasn’t been as fair as it could be to date. We thank the Commerce Commission for its market study, we thank the people that have submitted into this, as well, and I commend it to the House.

I stand to take a call on the Fuel Industry Amendment Bill. As my colleague Tāmati Coffey has just spoken, it will provide help all across the country. When I was reading through what this bill is going to do, what interested me is that we are going to have a wholesale spot price that is published and, after a certain period of time, if there is a concern around it, the Commerce Commission can step in and have the power to take a look at what is happening. I think that this is something for everybody who puts fuel in at the pump—and we look at what is actually happening with petrol prices across the country. What you pay can depend on where you live, and even in a region like Hawke’s Bay, there are a number of different places you can buy petrol and yet it is different across the region.

By having this new legislation, it’s going to make sure that we all keep everybody in check. And I think it’s also something that we can do when you look at the good, how we have monitored the drop in the 25c a litre tariff on fuel when we have been reducing it during this period of time of the cost of living crisis. I don’t think that we will see petrol companies wanting to be investigated, so I think that this is sending them a strong message. And we should see, over this period of time, competition improve and the price of fuel become more competitive. So, on that, I commend this bill to the House. Thank you.

Isn’t it interesting that we’ve just had a bill where speaker after speaker referred to the “just transition” and spoke about how we were “racing towards a fossil fuel - free future”, and then, immediately after passing that bill on to a select committee, they’re here in the House talking about a bill that is going to encourage competition in the delivery of fossil fuels to New Zealanders.

This just points out the complete confusion that the current Government has in their energy policy. On the one hand, big, big raps a few years ago for shutting down the oil and gas industry offshore in New Zealand; then creating a circumstance where oil refinery was disposed of; talking constantly about how we had this “just transition” going on, mentioning things like hydrogen fuel, etc.; and then suddenly realising that, actually, even with all the work that’s been done in hydrogen, we don’t have it available just yet, so what is there?

We had one member talking about how his car broke down in the 1970s inside the Mount Victoria Tunnel. Well, every car will be broken down if these guys keep going the way they are.

This is a nonsense bill. It will have absolutely no effect. It’s designed to fool New Zealanders into thinking that, somehow, the market study that the Labour Party did using the Commerce Commission is having some effect. It’s not. There will always be the fact, now, because of their policy, we are so dependent on foreign oil supplies that determines the price that New Zealanders pay for fossil fuels. It’s a ridiculous bill, and while we were happy to see it perhaps discussed with a select committee—

💬 Matt Doocey: No, we’ll oppose it, I think.

Oh we’re opposing this? OK, I think we should, because it’s complete rubbish. It’s a filler; it’s just the Labour Party filling up time to get to a little bit more of an appearance of actually doing something. It’s unreal. So we’re not going to support that.

Members, the time has come for me to leave the Chair for the dinner break. The House will resume at 7 p.m.

Sitting suspended from 6 p.m. to 7 p.m.

Thank you, Mr Speaker. It’s a pleasure to rise and take a call on the Fuel Industry Amendment Bill, which is finishing its second reading tonight, and this is quite timely for me in my seat of Nelson, as the local MP. One of the matters that has been recently raised with me is the issue that we face across the country with a range of fuel prices, and there has been a lot of commentary over many years and evidence to show that those of us who live in the South Island often pay a higher price for our fuel. I must say, even with additions of things like the regional fuel tax in Auckland, fuel was still more expensive in my electorate of Nelson than it was in Auckland.

This is one of the reasons why in 2019, the Government conducted a market study into fuel pricing, and what it showed was that there are a number of markets that operate in a similar way. We’ve also been looking recently at the supermarket industry, and in the past, the previous Labour Government—the fifth Labour Government—looked at the telecommunications industry, where we often see a real tension and challenge between the wholesale part of the market and then the retailers. This is what this bill is seeking to address. When we have markets that don’t provide for new entrants to be able to enter easily, it does require the Government to act, and it’s appropriate that the Government does intervene at that point. We know at the moment that with the cost of living being the way it is, one of the particular challenges we face is around the cost of fuel and the impact that that has not only on household budgets but also on businesses that rely on fuel in order to transport their goods, and there are the challenges that that brings.

So I want to talk a little bit about some of the things that the bill specifically does. What it does is it introduces what’s called a terminal gate price, known otherwise throughout the select committee report—it is a nice acronym; I think perhaps I might need to talk to them about my plain language bill—as the TGP. The bill specifically looks at the terminal gate price for the wholesale fuel market, and so what this regime does is it requires the wholesale fuel suppliers to publicly post the price on which they would sell a specified engine fuel to wholesale customers on a spot basis. So what that does is ensure that there’s transparency around those prices.

It’s one of the things that I think causes people a lot of frustration, and, certainly, this comes through to me as the local MP in Nelson—how do we get to the point where we have prices the way that they are? So allowing that transparency is a very important part of the regime that we are introducing through this bill.

The other point is the ability for the bill to allow the Commerce Commission to recommend price regulation of these—apologies for the acronym—TGPs. One of the matters relating to this is to ensure that if it is appropriate, the Commerce Commission can intervene. We’ve certainly seen over the last couple of years, with the cost of living, a significant increase in fuel prices due to issues in Ukraine, in particular. But we’re also mindful as a Government that it’s important that we have that transparency and that we do have that ability to intervene when we need to.

This is an excellent bill. It is one of the ways in which our Government is focused on the cost of living for New Zealanders. It is ensuring that our markets operate in the interests of New Zealanders, and I commend it to the House.

In accordance with a determination of the Business Committee, we now move to the Sale and Supply of Alcohol (Rugby World Cup 2023 Extended Trading Hours) Amendment Bill.