Z Energy admits breach of new price board rule that took effect today

Friday, 11 February 2022

Z Energy’s service station in Crofton Downs, Wellington, was not displaying the price of ‘95’ on Friday, despite an initial assurance from the company that all its stations were complying with the new legal requirement.

Z Energy has breached a new rule that took effect on Friday that requires petrol companies display the prices of all engine fuels they sell on their forecourt price boards.

A spokeswoman said it was confident the error at its Crofton Downs service station in Wellington was a “one-off”.

The regulation was designed to help address concerns that petrol firms were charging high premiums for ‘95’ and ‘98’ octane petrol.

It was one of the major recommendations of the Commerce Commission’s market study into the fuel industry which concluded in 2019.

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Z Energy spokeswoman Haley Mortimer initially said on Friday morning that all its service stations were “absolutely” in compliance with the new rule.

However, she later acknowledged that its service station in Crofton Downs in Wellington was not displaying the price of 95 on its price board after Stuff visited the site.

Z Energy said it was confident the issue at this service station was a “one-off”.

Mortimer said inquiries showed that was the result of a human error.

“We sought consent to move the prices to an LED board which wasn’t initially granted.

“Between one team seeking consent to put in an LED sign and another team being responsible for the manual signage update, to be frank, it just fell through the cracks.”

The situation would be resolved by the end of next week, she said.

The Commerce Commission advised in August it could seek court-imposed penalties of up to $5 million if fuel businesses did not comply with new rules that flowed from its market review, which also include new regulations concerning terminal gate pricing and wholesale contracts.

Petrol companies had been given almost two years to update their price boards after the Government first announced it would legislate the requirement.

Z Energy chief executive Michael Bennett said at that time that it intended to display the price of premium petrol at all its Z and Caltex service stations by the middle of 2020, describing an 18-month period grace as unnecessary.

The new signage rules would appear to favour Z, as they could potentially give it a relative advantage over rivals that sell more ‘98’ octane fuel at a higher price premium.

AA policy adviser Terry Collins said it was aware that a large number of petrol stations had been updating their signage over the past two months.

He had not been aware of any other breaches.

The AA had lobbied hard for the rule change which it had assumed would reduce the price premiums for higher octane fuels, which it believes have been excessive.

But Collins said the extra signage was only effective when motorists were in an area.

“Our advice is have a look on the phone apps that have gas prices and plan where you are going to get your petrol because it may be cheaper part way through your journey than it is at your destination.”