Legislative Council, Thursday 8 September 2022

Ms FORREST question to LEADER of the GOVERNMENT in the LEGISLATIVE COUNCIL, Mrs HISCUTT

On Tuesday 23 August I asked the Leader a number of questions with regard to shipping services for King Island. I noted that retail fuel prices were on average usually 40 cents to 45 cents higher on King Island than in regional Tasmania. I asked for a breakdown by percentage of cost for each component or element of charge by Bass Line that related to (1) fuel supply/commodity; (2) transport - road and sea; (3) wholesale storage and distribution; and (4) retail.

I was informed Tasports does not set the price of fuel service stations on the island and that is set by the retail operator. The Leader advises it is not possible to provide a breakdown by percentage of the elemental costs referred to above involved in fuel supply to King Island. Tasports manages fuel distribution and transport to its customers. It sells fuel on King Island on a wholesale basis. Bass Islands Line role is limited to the sea freight transport component. Tasports does not set retail prices and notes the margin applied to fuel by retailers will be a matter for the retailers.

In 2014 Flinders Island appointed Resonance Consulting to conduct a fuel supply study. The costs associated with the supply chain were based on summary cost data and information provided by Tasports. Resonance Consulting had not sighted actual invoices or costs or been provided with any commercial or contractual arrangements. The report described the imputed cost of supply to the island of LSD, excluding GST, is predominantly the fuel commodity. The supply chain was summarised as per below:

Fuel supply/commodity 81.2 per cent
Transport (road and sea) 6.3 per cent
Wholesale storage and distribution 6.9 per cent
Retail 5.6 per cent.

The Australian Institute of Petroleum provides daily details of the terminal gate prices (TGP) around the nation on their website. My research shows a difference of at least a dollar between TGP and the retail price on King Island.

My question is to the Leader, if a breakdown can be provided in 2014, and in light of the above information, can a breakdown of costs now be provided for King Island?

ANSWER

I thank the member for her question and her pursuit for some answers, but the previous advice from Tasports still stands that a breakdown cannot be provided. This remains the case for two primary reasons. Firstly, Tasports is one of two fuel suppliers on King Island. Tasports supplies fuel to one service station out of the two on the island, as well as farmers who have arrangements in place with the organisation. Tasports also supplies fuel to Hydro Tasmania to support their electricity generation. The remaining customers are serviced by the other fuel operator.

Given that Tasports is not the only provider, the fuel supply contracts operating on King Island are of a commercially sensitive nature and disclosure may endanger or disrupt the King Island market.

Ms Forrest - I only asked you for percentages.

Mrs HISCUTT - Secondly, fuel prices varies depending on the terminal gate price at the time that fuel is purchased by Tasports. In order for Tasports to reflect the most accurate pricing on the island, the wholesale price is calculated based on purchase and sale average at a minimum of once a week, so it is only ever as accurate as the stock on hand.

Tasports manages fuel distribution and transport to customers. It sells on King Island on a wholesale basis. Tasports does not set the retail price and the margin applied to fuel by the retailers would be a matter for the retailers.

Ms FORREST - Mr President, I have a further question related to answers provided last week, but I reiterate I asked about percentages. I find it extraordinary that percentages of a breakdown of components of transport could be commercially sensitive. Dollar amounts, perhaps, percentages no. Anyway, maybe the Leader might put that back to Tas Ports. I will ask my next question.