Where disputes cannot be resolved between the parties, the dispute resolution scheme in the Oil Code of Conductprovides the downstream petroleum retail industry with an effective, timely and cost effective way of resolving disputes through the appointment of a mediator or other person to assist the parties.
The dispute resolution mechanism is provided under Part 4 (sections 40 to 47) of the Oilcode and applies to:
- a dispute arising if a wholesale supplier fails to supply a declared petroleum product to a customer
- a dispute arising between the parties to a fuel re-selling agreement
- a dispute arising in relation to any other provision of Part 2 or 3 of the Oilcode
The Oilcode scheme does not apply to disputes relating to pricing issues such as allegations of predatory pricing activities and concerns about below cost selling of declared petroleum products. In these circumstances you may wish to seek the assistance of the ACCC which has the power to investigate and take enforcement action if it considers it appropriate.
What is the Terminal Gate Price?
The terminal gate price (TGP) is the wholesale price of a declared petroleum product worked out on a 15˚ C temperature-corrected basis and expressed in cents per litre.
What is a declared petroleum product?
A declared petroleum product includes the following temperature corrected motor fuels:
- unleaded petrol
- a product consisting of a blend of unleaded petrol and ethanol
- a product consisting of a blend of unleaded petrol and one or more biofuels other than ethanol
- premium unleaded petrol (other than premium unleaded petrol proprietary product)
- diesel fuel other than a diesel proprietary product.
Who is a Wholesale supplier?
A wholesale supplier is a person who sells declared petroleum products such as unleaded petrol and diesel by wholesale from a wholesale facility such as an oil refinery, a shipping facility or a facility connected by a product transfer pipeline to an oil refinery or a shipping facility.
Who is a Customer?
A customer under the Oilcode, is a person engaged in the business of retailing or wholesaling declared petroleum products or an associate of that person. It does not mean a member of the public purchasing fuel at a service station.
Who is a Retailer?
A retailer is a person who carries on the business of selling or supplying petroleum products to end users, or who is a retailer or participates as a retailer under a fuel re-selling agreement.
Disputes about failure to supply a declared petroleum product
The Oilcode gives the DRA the power to become involved in failure to supply disputes because of the potential for commercial damage that may follow as a consequence. Where a wholesale supplier fails to supply a declared petroleum product it is open to the customer to notify the Oilcode DRA that a dispute exists.
In the event that a wholesale supplier’s supply of a declared petroleum product is interrupted or if they have a shortfall of supply, they may, under section 42 of the Oilcode, notify the DRA of this. A customer may also notify the DRA, under section 43 of the Oilcode, if a dispute arises in relation to a wholesale supplier’s failure to supply a declared petroleum product to them.
Where the parties are in dispute about failure to supply, the retailer may notify the DRA that the dispute exists and ask the DRA to attempt to resolve the dispute. The complainant must tell the respondent in writing:
(a) the nature of the dispute; and
(b) what outcome the complainant wants; and
(c) what action the complainant considers will settle the dispute.
The retailer must provide the following information to the DRA to attempt to resolve the dispute.
- the nature of the complaint; and
- the parties to the dispute; and
- the expected effect of the disputed conduct.
The retailer must, within a reasonable time, give the DRA evidence to support their complaint.
If the wholesale supplier has not provided information, the DRA may seek copies of the wholesale supplier’s records regarding the failure to supply. The wholesale supplier must comply with the DRA’s request and give the records to the DRA as soon as practicable but within six hours of the request.
This requirement reflects the urgency of supply issues. The DRA may then make a non-binding determination about the dispute.
Disputes other than supply of a declared petroleum product.
The Oilcode generally recommends that the customer first attempt to resolve the dispute between the parties by themselves. The dispute may have arisen out of a lack of understanding and with discussion with the other party, may easily be clarified and resolved.
For disputes that do not relate to the supply of a declared petroleum product, parties must attempt to agree about how to resolve the dispute, unless the DRA is satisfied that there is no reason to attempt negotiation.
The parties must, under section 44 of the Oilcode, notify the DRA if they cannot agree about how to resolve the dispute. The DRA will appoint a neutral person to assist the parties resolve the dispute. In some situations the DRA may make a non-binding determination about the dispute.
What if someone doesn’t comply with the Oilcode?
A breach of the Oilcode is essentially a breach of the Competition and Consumer Act. If someone doesn’t comply with the Oilcode, the ACCC or affected individuals may bring civil proceedings in a court for relief, such as damages or an injunction.