CHAIR (Senator Brandis)—Welcome to this roundtable forum on the issue of petrol pricing in Australia. These proceedings are parliamentary proceedings. That means that all participants are protected by parliamentary privilege in respect of their evidence. The roundtable format which is used by Senate committees on occasions is designed for flexibility, and I propose to conduct the proceedings this afternoon in a relatively unstructured way. I think you have seen the terms of reference for this inquiry, but I will read into the record the substance of the letter that was written to each of you, which deals with the various topics which may be canvassed this afternoon:

The adequacy of the ACCC’s powers in relation to petrol prices and whether these should be strengthened;

The adequacy of competition within the market;

Whether there is a case for treating petrol differently from other commodities in terms of monitoring and controlling prices;

Whether changes are needed to stabilise petrol price fluctuations and address perceptions of unfair pricing practices on the part of oil companies and retailers and, if so, what policy options might be available;

What, if anything, could or should be done to address petrol price disparities between regional and metropolitan areas; and

Options for addressing the impact of high fuel prices on charities and persons on low or fixed incomes.

As I said, those are merely among the topics which may be addressed. It is my intention to afford the opportunity for all participants to canvass issues as broadly as they feel are relevant. The various topics which I have just mentioned of course do not indicate any view of the committee in relation to any of those matters, at least at this stage.

I will invite each witness to tell us a little of their particular professional expertise so far as it bears on this inquiry. Then Mr Warwick Richards will introduce the discussion with a PowerPoint presentation. After that, I might invite each of the other expert witnesses to make any preliminary comments that they wish to make, either arising from Mr Richards’s presentation or otherwise. Then we might move to questions. Although this is essentially a question and answer format and is not an occasion for political speeches—and I say that as a caution to me and my colleagues—because it is a roundtable I think the question and answer format will most conveniently merge into a discussion among all of us, both experts and senators.

Mr Richards—I am basically a petroleum economist. I have been working as a professional petroleum economist in Australia and around the region for 25 years. My company is Economic and Energy Analysis. We provide consultancy and fuel facility management services in the market in the region. In that capacity, we monitor and track the national and regional oil market and we are involved in setting up and negotiating supply agreements and in providing advice to other, principally large, participants in the market.

Dr Saddler—I am the Managing Director of Energy Strategies. We are a consultancy company based in Canberra. I have been on leave for the last three weeks, and this invitation came during that time. To some degree I may be here under false pretences. I was previously in business with Mr Richards, and we did the sort of work that he was talking about, but about 10 years ago I moved on. My current field of expertise and that of my company is more in relation to general energy policy, greenhouse policy and the relationship between the two. So I may not be able to help very much on some of these matters. However, I do have views on some of the bigger picture issues. We do a lot of work in those sorts of areas for the Commonwealth government and for the private sector.

CHAIR—I should make it clear that we do not expect that each of you will profess expertise on each of those issues.

Mr James—I am the Chief Economist at CommSec. I am effectively a market commentator or market interpreter. We look at big picture trends and influences and determine what that means for, particularly, things like interest rates, economic growth and the economy as a whole and, in turn, what the implications are for our customers. We get them to ask the ‘so what?’ question about higher oil prices—what they mean in terms of interest rates, fuel usage and the impact on certain industry sectors. Certainly we do not just cover petrol; we look at a broad range of issues. One of the other issues we are looking at at the moment is water and drought. The expertise tends to be broader and covers a variety of sectors.

Dr Mundy—I am director of a small consulting firm by the name of Bluestone Consulting. Our primary area of work is in regulatory economics in the infrastructure sector and also assisting companies on matters relating to authorisations and notifications under other parts of the Trade Practices Act. We also do a reasonable amount of work in the transport sector, more generally—for example, at the moment we are advising the Victorian government on the deepening of the Port Phillip channels. Formerly I was head of corporate strategy at Melbourne airport. I had general carriage of that organisation’s dealings with the ACCC when airports were subject to notification under what is now part VIIA and what was then the PS Act. I have previously appeared before the committee on behalf of the Infrastructure Council when the committee inquired into part IIIA.

Prof. Kerin—I am professorial fellow in strategy at Melbourne Business School. My main career is as a microeconomist. I am not a petrol pricing expert, although many years ago a lot of my research focused on transportation issues. My PhD was on strategic management of passenger transportation systems, including pricing and operating strategies. Many years ago I looked at rail and road splits in grain handling transportation in a regional area of Australia, the Eyre Peninsula of South Australia. For the last 15 years I have largely focused my career on management consulting and teaching microeconomics. I also write for Fairfax business media in BRW magazine and the Australian Financial Review. I have covered some transport related issues there. A lot of the focus on my work in those publications is on issues of free market versus regulation.

CHAIR—Thank you. We might then proceed, as indicated, with Mr Richards’s presentation. How long do you think it will take, Mr Richards?

Mr Richards—About 20 to 25 minutes.

CHAIR—Okay. As I say, we will then have others make any remarks they might wish to make and then we will proceed to the discussion. As a formality, I take it that there are available hard copies of the exposures that we are going to see in this PowerPoint presentation?

Mr Richards—I do not have them with me today, but we can make them available.

CHAIR—Would you do that for us, please?

Mr Richards—Yes.

CHAIR—Could somebody move that we receive those exposures as an exhibit?

Senator STEPHENS—So moved.

CHAIR—Fine; that is done.

A PowerPoint presentation was then given—

Mr Richards—I think it would be useful in terms of the economists’ roundtable to focus on the economic con