Australia introduces retail oil industry code of practice

A long-awaited reform of Australia’s downstream petroleum sector came into force March 1 with the introduction of a mandatory industry code of conduct known as Oilcode. Oilcode provides for standard contractual terms and conditions for reselling agreements between wholesale suppliers and retailers; a national approach to terminal gate pricing arrangements; and, a low-cost dispute resolution scheme. “The code will also enhance competition in this important market,” said Australian Resources Minister Ian Macfarlane. Oilcode was developed in consultation with the industry to streamline the regulatory framework for the retail petroleum industry, provide greater transparency of pricing and remove structural restrictions on competition. It was introduced following the repeal last year of legislation limiting the number of retail sites that could be owned by the four oil majors operating in the local market–BP, Caltex, Shell and Mobil. The Petroleum Retail Marketing Sites Act 1980 and the Petroleum Retail Marketing Franchise Act 1980 were originally designed to limit the ability of the vertically integrated oil companies to set retail prices and to encourage smaller operators into the market. (March 1, 2007)