Petrol wars

A few weeks ago some petrol station proprietor discounted heavily his petrol become a local hero. Now whole chains are discounting fuel but are being branded as villains:

It was revealed this morning that supermarket giant Coles would offer the largest petrol discount of 40c a litre for shoppers across Australia who spend more than $300 on groceries.

Under the scheme, shoppers spending more than $100 get 10c a litre off, those spending more than $200 save 25c a litre, and customers spending more than $300 get a 40c a litre discount, the Herald Sun reports.

Rival Safeway has since announced that it would match the discounts from 12pm (AEST) today for Victorian customers only.......

Independent Senator Nick Xenophon blasted the offers as proof of "obscene" power in the petrol market.

"If they can offer discounts at this level, surely this is proof that the big oil companies and the supermarket chains are overcharging massively when they aren’t offering discounts," Senator Xenophon said......

It proves no such thing. Retailers do loss making markdowns on selected items all the time. Its an incentive to get people into their shops. The hope to make up the loss on increased sales overall.

When petrol prices were going up people were complaining now that they are going down they are still complaining. You can never please some people.

Why Michael Costa was useless

Many Liberals like former NSW Labor Treasurer Michael Costa. He even has his on Facebook Fan Page. I myself enjoy reading his articles but the latest shows whats wrong with the NSW government and his fatal flaw.

In last week's Australian he wrote on the Woolworths/Coles duopoly and good free markeeter he is, wants to remove barriers to competition:

The real danger in the government's decision to walk away from its election commitment is not lack of consumer information but rather that the major underlying problem in retail competition, planning barriers to entry, will not be addressed effectively.....

Problems here are in jurisdictions normally outside the control of the federal government: state government planning departments and local councils. The ACCC correctly identified that state planning laws which contributed to a lack of suitable sites for new grocery retailers were a significant barrier to entry for competitors to the majors.

Look, those departments and Councils are under the control of the State government. Mr Costa was a member of that government and rose to the position of Treasurer . So why didn't you do something about Michael? How about Accepting some responsibility?

Instead he reverts to the Labor State politician's mindset- its the Feds fault:

The federal government needs to deal with urban planning and land use as part of its national competition reform agenda. The argument that this is a state and local government issue does not have credibility given the federal government intrusion through its environmental legislation into what were traditionally state and local government issues.

Bumping the problem upstairs is not going to help, the Feds will meet the same opposition to change that State politicians find. What is required are real state leaders who accept responsibility and are willing to make tough decision and see them carried out. Mr Costa proves he was never the man for the job.