Petroleum Retailers Rights and Liabilities Repeal Bill 2025
Introduction and first reading
Bill introduced, on motion by Hon Dan Caddy (Parliamentary Secretary), and read a first time.
Second reading speech
Hon Dan Caddy (North Metropolitan Region—Parliamentary Secretary) (5:22 pm): I move:
That the bill be now read a second time.
Today I introduce the Petroleum Retailers Rights and Liabilities Repeal Bill 2025. The bill will repeal the Petroleum Retailers Rights and Liabilities Act 1982 and the regulations made under that act and make consequential amendments to the Petroleum Products Pricing Act 1983.
The purpose of the act was to increase the bargaining power of fuel retailers to better negotiate competitive prices for fuel supplies. The act was originally intended to give retailers a right to purchase up to 50% of their fuel supplies from suppliers other than their primary supplier under a franchise agreement. It was also intended to allow a retailer to use a franchisor's storage and dispensing equipment for fuel purchased from other suppliers.
The act was amended in 2001 to address a problem in the act identified by the Supreme Court in the case of BP Australia Ltd v Dragoon Holdings Pty Ltd [1991] WASC 145. This case found that the act only gave franchisees the right to use the franchisor's storage equipment and did not provide any extra rights to buy fuel from other sources. The Petroleum Legislation Amendment Act 2001 amended the act to address this issue.
A statutory review was conducted of the act recently, which identified that use of the act since the passing of the 50/50 legislation appears minimal. The Department of Energy, Mines, Industry Regulation and Safety's Consumer Protection division has received only two inquiries about the act since the 2001 amendments.
There are two issues that appear to contribute towards the low usage of the act. Firstly, changes have occurred in the regulatory environment for fuel retailers since the introduction of the act. These are the terminal gate pricing system, introduced under amendments made to the PPA, and the introduction of the Commonwealth downstream petroleum reform package. Both have increased the transparency of wholesale fuel pricing.
In 2001, the state government created FuelWatch as a fuel price monitoring service. This service monitors and reports on wholesale—sales to fuel resellers—and retail fuel prices under the PPA. The terminal gate pricing system requires terminal operators to provide daily wholesale prices to FuelWatch. These prices are then published on the FuelWatch website.
In 2007, the Australian Government introduced the mandatory Trade Practices (Industry Codes–Oilcode) Regulations 2006, now the Competition and Consumer (Industry Codes–Oil) Regulations 2017, as part of its downstream petroleum reform package. The aims of the oilcode are to improve transparency in wholesale pricing and access to petroleum products at a published terminal gate price, to set minimum standards in relation to contract requirements and to assist participants to make informed decisions when managing fuel re-selling agreements.
Secondly, there are significant practical difficulties associated with using the act, which relate to supply relationships, environmental protection laws and storage tank and dispensing equipment costs.
It appears that retailers are not using their right to buy up to 50% of their fuel supplies from other suppliers because of the importance of maintaining firm supply relationships with primary suppliers. Exercising rights under the act may put these relationships at risk.
Further, federal and state environmental protection laws also mean that there are mandatory minimum quality standards for each type of fuel. The risk of fuel contamination inhibits retailers from mixing fuel from different suppliers. Elimination of this risk requires retailers who wish to use the act to install a separate storage tank and dispensing equipment for fuel purchased under this scheme. This is cost prohibitive.
A report on the statutory review of the act, which was tabled in Parliament on 11 October 2023, recommended that the act should be repealed. The repeal of the act requires that consequential amendments are made to the PPA, which contains references to the act. This will result in penalties that were prescribed under the act being incorporated in the PPA by way of simple amendments.
Pursuant to standing order 126(1), I advise that this bill is not a uniform legislation bill. It does not ratify or give effect to a bilateral or multilateral intergovernmental agreement to which the government of the state is a party, nor does this bill by reason of its subject matter introduce a uniform scheme or uniform laws throughout the Commonwealth.
Consistent with government policy of repealing unnecessary and/or outdated legislation, I commend the bill to the house and table an explanatory memorandum.
(See paper 96.)
Debate adjourned, pursuant to standing orders.
