LAST week the Australian Competition Consumer Commission relaxed competition regulations designed to stop price gouging at the bowser to ensure the oil and gas industry stayed afloat, as businesses battle the COVID-19 pandemic and low oil prices.
On Friday afternoon the ACCC granted "formal authorisation" to oil refiners and fuel suppliers to share data and coordinate refining and storage capacity.
Refiners are now free to sell fuel and oil to each other. They can also redirect import vessels to different ports to ensure supply is spread evenly across the country, and boost supply in remote and regional areas.
However, refiners and fuel suppliers will not be able to coordinate on retail and wholesale prices of oil.
The Australia Institute of Petroleum - the peak body for major refiners and fuel suppliers - warned the ACCC in March that due to the sudden decline in fuel products, refineries could close their doors as they could not "sufficiently reconfigure production to meet sudden and significant changes in demand."
The ACCC responded by guaranteeing refiners and suppliers would not be taken to court for conduct that flouts competition provisions of the Competition and Consumer Act involving shared data and import coordination.
"In these exceptional times, fuel companies will be allowed to coordinate the scheduling of fuel imports, storage and delivery to maintain and increase supplies and minimise the risk of shortages," ACCC chair Rod Sims said on Friday afternoon.
Just hours before the ACCC announcement, fuel giant Caltex closed its Lytton refinery citing the COVID-19 crisis and "broader dynamics" in the fuel market.
The refinery will remain closed until margins increase to protect Caltex cash flows.
The ACCC rules will apply to all members of the Australian Institute of Petroleum, including BP Australia, Caltex Australia, Mobil Oil Australia (ExxonMobil) and Viva Energy Australia.
"We have authorised the measures by the petroleum industry to enable the companies to ensure the security of the fuel supply for Australian businesses and consumers, especially for when economic activity can increase again," Sims said.