Petroleum Retail Marketing Sites Regulations (Amendment) 1997 No. 355
EXPLANATORY STATEMENT
Statutory Rules 1997 No. 355
Petroleum Retail Marketing Sites Regulations (Amendment)
Section 15 of the Petroleum Retail Marketing Sites Act 1980 (the Act) provides that the Governor-General may make regulations for the purposes of the Act.
Section 12 of the Act provides a person the right to obtain an injunction when a prescribed oil company (oil company named in the regulations) operates above its quota. Section 12 is the only provision in the Act where there is a possibility of a private right existing.
The Act is designed to restrain vertical integration (ie. firms producing related goods and services in a supply chain) by the major oil companies, in order to encourage competition between resellers at the retail level. The Act establishes quotas on the number of retail outlets which each company may directly operate.
The Petroleum Retail Marketing Sites Regulations (Amendment) ("the proposed Regulations") amend the Petroleum Marketing Sites Regulations ("the principal Regulations"), to allow a temporary increase in BP Australia Ltd's allocation from 87 to 102 sites for the period 1 August 1997 to 31 December 1997.
The term "retail site" is defined in Section 3, the Interpretation Section of the Act, as "premises at which motor fuel is sold by retail", in other words, a petrol station which sells petrol in retail trade,
he site increase is to operate retrospectively from 1 July 1997 to coincide with the date at which BP Australia exceeded its quota by being unable to divest itself of 15 excess retail sites in Victoria. These sites were acquired together with the 100 per cent ownership of distributor Woolman Petroleum Pty. A temporary increase from 87 to 105 was already approved by the Governor-General for the period 1 April 1996 to 31 July 1997.
The reason for increasing the allocation of sites from 87 to 102 is that BP Australia has sold 3 sites in Tasmania out of the total 18 excess retail sites available. The remaining 15 excess retail sites are located in Victoria, where suitable buyers are lacking due to market uncertainty and increased competition.
The operative part of the amendment (regulation 3) commences retrospectively to 1 August 1997.
Subsection 48(2) of the Acts Interpretation Act 1901 (the Interpretation Act) provides that a retrospective regulation may not adversely affect the rights of a person (other than the Commonwealth or an authority of the Commonwealth).
The Attorney General's Department is of the view that the right to obtain an injunction conferred by section 12 of the Act is unlikely to constitute a right for the purposes of section 48(2)(a) of the Interpretation Act. However, to ensure section 48 of the Interpretation Act is not infringed, a savings provision has been included (regulation 5) which preserves any rights existing under section 12 of the Act between the date the regulations are taken to have commenced and the date of their notification in the Gazette.
Overview
The Petroleum Retail Marketing Sites Regulations (Amendment) 1997, No. 355, addresses the issue of vertical integration within the petroleum industry by temporarily increasing BP Australia Ltd's quota of retail sites. Enacted under the authority of the Petroleum Retail Marketing Sites Act 1980, the amendment allows BP Australia to operate 102 sites instead of the prescribed 87 from 1 August 1997 to 31 December 1997. The Act aims to prevent major oil companies from controlling the supply chain and promote competition among retailers. The amendment seeks to correct an excess of 15 sites in Victoria, acquired through the purchase of Woolman Petroleum Pty, which BP Australia was unable to divest due to market conditions. This legislative adjustment, while retrospective to 1 July 1997, incorporates a savings provision to safeguard existing rights under section 12 of the Act, ensuring that the retrospective nature of the amendment does not adversely affect private rights.
Scope and Application
The Petroleum Retail Marketing Sites Regulations (Amendment) 1997 No. 355 amends the Petroleum Marketing Sites Regulations to allow a temporary increase in BP Australia Ltd's allocation of retail sites from 87 to 102, operating retrospectively from 1 July 1997 to 31 December 1997. This amendment arises from BP Australia's acquisition of Woolman Petroleum Pty, which led to the company exceeding its quota by 15 sites in Victoria. The amendment is specifically designed to address the inability to divest 15 excess retail sites in Victoria due to market uncertainty and increased competition, despite BP Australia having already sold three sites in Tasmania. This amendment is a temporary measure and follows an earlier approved increase from 87 to 105 sites for the period 1 April 1996 to 31 July 1997. The Act's primary purpose is to restrain vertical integration by major oil companies and to encourage competition at the retail level by establishing quotas on the number of retail outlets each company may operate directly. The Act applies to major oil companies and their operations, specifically those named in the regulations, and encompasses conduct related to the marketing of petroleum at retail sites, which are defined as premises where motor fuel is sold by retail, such as petrol stations. The Act applies across the Commonwealth of Australia, and while it primarily concerns the oil industry, it indirectly impacts the retail market by regulating the number of retail outlets oil companies can operate directly. The amendment ensures that the rights conferred by the Act, such as the right to obtain an injunction under Section 12, are preserved and not adversely affected by the retrospective application of the regulation.
Key Provisions
The Petroleum Retail Marketing Sites Regulations (Amendment) 1997 (No. 355) primarily amends the Petroleum Marketing Sites Regulations to allow BP Australia Ltd to temporarily operate an increased number of retail sites. Under section 15 of the Petroleum Retail Marketing Sites Act 1980, the Governor-General has the authority to make these regulations. Specifically, regulation 3 increases BP Australia Ltd's quota from 87 to 102 sites, effective from 1 August 1997 to 31 December 1997. This increase accommodates BP Australia Ltd's inability to divest 15 excess sites in Victoria and aligns with their previous temporary quota increase from 1 April 1996 to 31 July 1997. The term "retail site" is clearly defined in section 3 of the Act as premises where motor fuel is sold by retail, i.e., petrol stations.
The Petroleum Retail Marketing Sites Act 1980 imposes specific obligations on oil companies to ensure compliance with the quota limits set forth in the Act. These quotas aim to prevent vertical integration and foster competition at the retail level. Companies must adhere to the stipulated number of retail outlets they can operate directly. For BP Australia Ltd, this means managing their operations within the prescribed limits, notwithstanding the temporary increase. Additionally, section 12 of the Act provides a private right for individuals to seek an injunction if an oil company exceeds its quota. However, the Attorney General's Department has noted that such a right is unlikely to be affected adversely by retrospective regulations, as per subsection 48(2) of the Acts Interpretation Act 1901. Nevertheless, regulation 5 of the proposed amendment includes a savings provision to safeguard any existing rights under section 12.
Non-compliance with the quota limits set by the Petroleum Retail Marketing Sites Act 1980 can result in significant consequences. While the Act does not explicitly outline specific offences or penalties, exceeding the quota may trigger legal actions, including the pursuit of injunctions as permitted by section 12. Moreover, operating above the quota without the authorised increase could potentially lead to legal disputes and enforcement actions by affected parties. Given the nature of the Act and its amendments, it is prudent for oil companies to meticulously manage their retail site operations to avoid breaching these regulatory limits. The potential repercussions underscore the importance of strict adherence to the established quotas and the temporary allowances provided by the amendments.