SpeechJONATHAN YOUNG (National—New Plymouth): Look here's the Government putting through legislation which they think is going to bring the price of petrol down in time. And guess what's going to happen tomorrow? The price of petrol is going up. What marvellous timing—what marvellous timing.Of course this bill is going to the Finance and Expenditure Committee. And of course Deborah Russell will chair that and get it through in quick sharp time.ASSISTANT SPEAKER (Hon Ruth Dyson): I forgot to say the question is that the motion be agreed to. Carry on my apologies.JONATHAN YOUNG: Thank you very much Madam Speaker. I was missing that moment.Look at the last election the pump price for a litre of petrol in Auckland was 205c a litre—$2.05 a litre. In January this year it was over $2.49 a litre. And even after the global depression with oil prices falling as they have through the floor a litre of petrol is still more expensive now than under the last National Government. What we've seen if you live in Auckland is that your price has gone up under this Government 25c a litre. All of that's to provide a light rail service to Māngere and I'm just wondering when that's going to happen.So here we see a Government in these last weeks of this parliamentary term rushing through a bill—a very complex bill in fact—that came out of fuel market studies initiated first by the Hon Judith Collins and then the Ministry of Business Innovation and Employment (MBIE) of course did a report on that. Then of course the Commerce Commission looked at that and they ran a conference themselves last year and brought all the fuel participants in to that conference to hear what they said. Of course you know they did say a lot. In fact as the Minister said the Commerce Commission published its final report on 5 December 2019 in which they came to the conclusion that the fuel companies had been making higher profits than would be expected in a workably competitive market. I was at that conference and I listened to those fuel market participants and what many of them had to say to the Commerce Commission and the commissioners there was that this is incredibly complex and You're not getting it you don't understand." So they had individual one-on-one meetings to go through the complexities of how this market works.A number of them made I think quite striking comments. Z Energy for instance said "Our view is that over time the continued expansion of low-cost distributors like Waitomo and others such as NPD will deliver the much-needed price competition and choice consumers want." And competition is much needed. Competition is very important. Competition is what maintains good service good prices and keeps the market honest.What they reported to this conference to the Commerce Commission—and BP said this—is that if the wholesale market was broken or if the majors enjoyed a structural advantage which impacted workable competition we would not have expected to have seen a total of 76 sites not from just the independent retail brands being Gull Waitomo NPD and Allied being built in the last five years alone.So the Government is saying there is not enough competition. Yet in the last five years 76 new outlets from independent—not the majors;—fuel companies have been built in New Zealand. They don't build something they don't invest millions of dollars unless they can get a share of that market. And they have. We all know about the Gull effect. We all know when they come to town the effect of competition. Competition is alive and well.I think what's happened is that this Government has seen an opportunity to charge out there on behalf of the consumer—time is running out and an election is coming near the price of petrol is going up tomorrow and here we are in the House today and they're beating their breast. And they're saying that they're doing the moral right and the moral good but what they are not listening to is the fact that there are adequate elements of competition that are operating. Look we all want to pay less without a doubt. There wouldn't be anybody on this side of the House who wouldn't want to pay less and that's just the way it is. You know here's what's happened in the last five years. Allied opened 16 new South Island and 13 new North Island sites. NPD opened 21 new South Island sites. Gull opened 12 new North Island sites. Waitomo opened 14 new North Island sites. It's interesting you know what we've seen. In fact I've got to say what Waitomo said and they made a very strong statement. They said "Of course one of the issues in regards to fuel price is excise taxes and regional fuel taxes. Taxes and other levies in New Zealand account for roughly 97c a litre of the pump price." So that's actually over half if you're buying 91. But what happens when the pressure comes on and prices go up? And it's often because the international exchange rate. It's often because of the price of oil on the international market. It's often because of lots of internal market mechanisms that have to be grappled with. It's usually the fuel suppliers that get attacked. And you know they get sent to the principal's office. They come to the Beehive. They're marched upstairs and they are told "Please explain." So I think what we do need to understand is that this is a particularly complex area and I do hope that the chair of the Finance and Expenditure Committee does a thorough job in three weeks in getting the committee's head around the complexities of how fuel markets operate.So what happens? They get criticised for taking too much margin. Well BP they reported—and look I know I'll probably get some smirks from the other side of the House saying "Well of course they would say that." But these are people who understand the market. They say that when margins were low between 2000 and 2010 we saw—this is when low margins existed for the fuel suppliers—almost 400 retail sites close and the exit of Shell from the industry. More recently as margins have restored we've seen expansion and investment as we would expect resulting in consumers now having the benefit of the broadest range of offers ever.What we need to understand in the competitive market is that unless people can make a margin they won't enter that market. So it's important to have a degree of profitability. And so what the Minister's saying "Oh that profitability is far too high."—but when that profitability was squeezed 400 retail outlets disappeared. Where's the competition? It's gone and you end up with a monopoly and then prices do get elevated. So what we've got to understand is market principles. You know this Government—in my final minute—have been very happy and ready to regulate everywhere over the energy sector and this is just another example of that. So in terms of terminal gate price you know I think a lot of people will support that idea and visibility around that may be helpful. But it's going to be interesting to see what that is going to do to prices because in the conversations I've had with chief executives in the energy sector in the liquid fuel energy sector they have said "Well that's happened in Australia but we haven't seen the effect come through in the market price." So we can tinker we can change we can put different mechanisms in place but the answer to all of this in terms of getting better pricing is having better competition. You've got to find the balance between having the right level of margin in terms of getting people into the market and you've got to have people going in there who can get their slice of that market and that's what we've seen with the independents. We've seen a huge increase of those independent retailers over the last five years so much so that many actually say that we do have a healthy competitive market.Look we're going to support this bill through to select committee because we want to enable people to come and have a say and I'm sure that's what's going to happen. I commend this bill and I do trust that the committee will do a thorough job in the very short three weeks they have to report back with."