Woods Megan; Salesa JennyThird ReadingHon Dr MEGAN WOODS (Minister of Energy and Resources): I present a legislative statement on the Fuel Industry Amendment Bill.ASSISTANT SPEAKER (Hon Jacqui Dean): That legislative statement is published under the authority of the House and can be found on the Parliament website.Hon Dr MEGAN WOODS: I move That the Fuel Industry Amendment Bill be now read a third time.In 2019 the Commerce Commission released its fuel market study. The commission's report indicated that fuel companies had been making persistently higher profits over the previous decade than could be expected in a competitive market and there is limited competition in the wholesale markets and this flows through to the retail markets and to consumers' pockets. One of the commission's key recommendations was to create greater transparency by requiring fuel companies to publish wholesale spot prices at fuel terminals. The passing of the Fuel Industry Act in 2020 saw the introduction of a terminal gate pricing regime for wholesale suppliers to make entry easier at the wholesale level.However the commission also identified two possible risks to the success of the terminal gate pricing regime: (1) that fuel companies use the terminal gate pricing regime as a vehicle to coordinate prices and (2) that in some areas particularly where a terminal is isolated a fuel company could exert market power at the terminal. As such the commission recommended that a regulatory backstop be introduced to ensure against the failure of the terminal gate pricing regime. This Government is implementing just that recommendation through this bill.The bill provides an incentive for wholesale engine fuel suppliers to offer competitive terminal gate prices. It does this by providing a process by which these prices could be regulated by the Commerce Commission after an inquiry and recommendation to the Minister. The Minister could then recommend to the Governor-General that an Order in Council be made declaring particular terminal gate prices subject to price regulation and the Commerce Commission would be responsible for setting the form of the price regulation and enforcing it. This would deter the misuse of market power and ensure better competition in the wholesale market. We do this because we expect this to flow through to consumers at the pump in the medium and the long term. This is a well calibrated process. It is not a return to the price regulation that we have seen in days past. This is a new power for the Commerce Commission and if the market works as it should and in line with what we expect then fuel companies should have every incentive to compete hard and to avoid being regulated. After experiencing high pricing volatility in 2022 the regulatory backstop mechanism is a necessary measure to give consumers confidence that increases in fuel prices are not being driven by unreasonably high margins. This is about a Government that is standing up for and alongside consumers and ensuring that they are protected. We have already seen that the Fuel Industry Act has contributed to more competition in New Zealand. The terminal gate pricing regime has supported the expansion into new areas by low-priced retailers such as Gull NPD and Waitomo. Gull has publicly stated that without the Act that our Government passed it would not be able to competitively source fuel to operate at South Island outlets and provide that competitive tension. I can tell you as a South Islander this has made a huge difference in our part of the world and that is because we had a Government that was willing to act on the side of consumers. This bill further supports these trends by providing strong incentives for fuel companies to ensure that terminal gate prices are competitive and provide insurance against anti-competitive behaviour that contributes to higher fuel prices and protects consumers from that.This Government recognises the need for a more transparent fuel system that works for New Zealanders. Though this backstop mechanism is just that a backstop it is a clear signal to the fuel industry that the Government is not afraid to step in if prices are not consistent with what would be expected in a competitive market. I want to thank the Economic Development Science and Innovation Committee again for their work and for their consideration of this bill. I believe that the changes that we have made to the bill as a result of the select committee process have resulted in a better and a more robust piece of legislation. I also want to thank all those who contributed to the preparation and passage of this bill and I look forward to seeing competition in our fuel sector continue to evolve and for New Zealanders to feel the effects of improved transparency in wholesale pricing flowing through to prices at the pump. I commend this bill to the House.ASSISTANT SPEAKER (Hon Jenny Salesa): The question is that the motion be agreed to.