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The Australian Competition and Consumer Commission (ACCC) has launched an investigation into suppliers servicing remote and regional parts of Australia. This move comes after receiving numerous complaints about fuel surcharges exceeding 70% in these areas.
Similar surcharges have been noted in urban areas, as businesses such as cafes, restaurants, and travel agencies have implemented additional levies.
According to Matt Grudnoff, a senior economist at the Australia Institute, misleading customers by falsely attributing price hikes solely to increased costs is illegal in Australia, as he shared with SBS Examines.
However, other types of price exploitation remain within legal boundaries.
“If a company observes a general trend of rising prices and chooses to elevate their own prices without any actual increase in costs, this practice is entirely lawful,” explained Mr. Grudnoff.
Professor David Byrne, who holds the Ritchie Chair of Economic Research at the University of Melbourne, emphasized the necessity of robust competition to help curb price gouging.
“If a firm sees that everybody’s talking about price increases and they decide on the back of that to increase their prices, even though their costs haven’t gone up, that’s perfectly legal,” Mr Grudnoff said.
Professor David Byrne, the Ritchie Chair of Economic Research at the University of Melbourne, said healthy competition is important to fight price gouging.
But he said this is a challenge in Australia.
“We have fewer firms supplying us. And so we see that in petrol. We see that in banking, supermarkets … these companies have market power,” he said.
When you only have a few players in a market, the lack of competition means you’ll get higher prices.
Professor David Byrne, the University of Melbourne
In this episode of SBS Examines, we look at price gouging and ask: how can Australians be prepared for future fuel price shocks?
With additional reporting by SBS Nepali, SBS Russian and SBS Chinese.
