The Independent Pricing and Regulatory Tribunal (IPART) has released its draft determination on electricity prices for New South Wales recommending increases of up to 62% (including inflation) by 2013. These increases were driven by increased network costs and the assumption of an emissions trading scheme being implemented in Australia.

Frontier (Australia) undertook detailed modelling to quantify the impact of an emissions trading scheme on the wholesale electricity market and NSW regulated customers.

For more information, please contact Marita O’Keeffe at m.okeeffe@frontier-economics.com.au or call on +61 (0)3 9620 4488.

The Australian Competition and Consumer Commission (ACCC) today issued its view objecting to Australia Post's draft proposal to increase the prices of the letter services over which it has a statutory monopoly. The three-year pricing proposal included an increase in the basic postage rate by 5c to 60c. The ACCC’s review of the proposal highlighted concerns with Australia Post’s demand and input cost forecasts. The demand forecasts were not transparently derived and were not therefore amenable to a critical review. Input costs were forecast to rise even though volumes were projected to fall, and this discrepancy was not adequately explained by Australia Post.

Frontier (Australia) was engaged by the ACCC to critically assess Australia Post’s demand and cost input forecasts used in its notification. Frontier’s report is available here.

For more information, please contact Marita O’Keeffe at m.okeeffe@frontier-economics.com.au or call on +61 (0)3 9620 4488.

The Australian Competition and Consumer Commission (ACCC) has announced that it will oppose the proposed acquisition of Mobil Oil Australia’s retail assets by Caltex Australia Limited. The ACCC gave two reasons for its decision. The first was that the local competition around 53 Mobil retail sites would be likely to be reduced as a result of the acquisition. Graeme Samuel, the chairman of the ACCC, has stated that removing these sites from the deal would not be sufficient for the deal to gain approval from the ACCC. This is because of the second problem that the ACCC identified. This was that the acquisition would increase Caltex’s share of retail sites in the wider Metropolitan areas of Brisbane, Sydney, Melbourne and Adelaide; and, in the opinion of the ACCC, this would increase the stability of the weekly price cycles compared with a situation in which some or all of the sites were acquired by more maverick or aggressive retailers.

Frontier (Australia) was retained by solicitors for Caltex to undertake detailed empirical analysis of the impact on the retail prices of Caltex of concentration in local retail areas.

For more information, please contact Marita O’Keeffe at m.okeeffe@frontier-economics.com.au or call on +61 (0)3 9620 4488.