Price gouging at petrol stations may not actually be illegal in Australia, experts are warning as fuel prices surge in response to the Middle East war - leaving consumers with little protection from retailers exploiting the crisis.
Legal analysts say Australia's consumer protection laws contain significant gaps when it comes to rapid price increases during crises, even when those increases far exceed the actual cost changes faced by retailers.
Australian motorists have watched bowser prices jump 25-30 cents per liter in recent days as the conflict between the United States and Iran sends global oil markets into turmoil. But the increases are hitting Australian pumps far faster than they're hitting the wholesale fuel that retailers actually purchased weeks ago.
Mate, this is the great Australian petrol price rip-off playing out in real time. Everyone knows it's happening. But it turns out there's not much the government can legally do about it.
The Australian Consumer Law prohibits "unconscionable conduct" in commerce, but experts say proving that fuel retailers are engaging in unconscionable conduct during a genuine international crisis is nearly impossible.
Retailers can argue they're pricing for future replacement costs, not current inventory costs. They can point to market uncertainty and the need to hedge against further increases. The law gives them wide latitude.
The ABC reports that consumer advocates are calling for emergency price controls, but the government has shown little appetite for that kind of market intervention.
The Australian Competition and Consumer Commission monitors fuel prices but has limited enforcement powers. It can investigate anti-competitive behavior and misleading conduct, but rapid price increases in response to a real supply shock don't necessarily violate competition law.
Here's the perverse outcome: retailers can - and do - raise prices instantly when global oil prices rise, citing replacement costs. But when oil prices fall, they lower prices gradually, citing existing inventory costs.
