ACCC’s Rod Sims says OPEC nations are ‘appalling’ for inflicting super-high petrol prices

THE consumer watchdog says motorists are “financing the extravagance” of oil-rich nations like the UAE, which recently paid $600m for a Leonardo da Vinci painting for its Louvre museum.

EXCLUSIVE

ACCC boss Rod Sims says motorists are increasingly “financing the extravagance” of oil-rich nations such as the UAE, which recently paid a world-record $600 million for a Leonardo da Vinci painting for its new $2.6 billion version of the Louvre.

The scale of the rort — and its unparalleled impact on the cost of living — can today be detailed for the first time.

Since OPEC countries including the United Arab Emirates orchestrated an oil supply cut in 2016 the cost of a litre of unleaded petrol has risen by more than a third, from $1.14 to $1.53. That’s added $27 to the price of filling a family car, putting more additional pressure on household budgets than any other single expense.

Mr Sims, the Australian Competition and Consumer Commission chairman, described OPEC’s gouging as “appalling”.

The exterior of Louvre in Abu Dhabi, which cost a whopping $2.6 billion.

“When people in Australia say there’s something going on here that is causing us to pay a lot of money for petrol, they are right — it’s called the OPEC cartel,” Mr Sims said.

“The OPEC cartel is the number one factor in the height of petrol prices.

“This is a transfer from Australian motorists to the OPEC countries,” Mr Sims told News Corp Australia. “I can well understand why Australian motorists resent this and I think they should.”

The Organisation of the Petroleum Exporting Countries’ official mission is to “coordinate and unify the petroleum policies” of its 14 member nations, which include Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar and the UAE. The UAE’s president is Sheik Khalifa bin Zayed Al Nahyan.

Leonardo da Vinci’s Salvator Mundi was purchased for $600 million.

Asked about the largesse of OPEC nations, as demonstrated by the UAE’s recent purchase of Leonardo’s Salvator Mundi for $US450 million ($590 million), Mr Sims said: “I think Australian motorists have got every reason to be upset that the OPEC countries are making a lot of money from the high price of petrol.

“It is appalling. There is no other way to put it.”

CommSec chief economist Craig James said petrol had surpassed bills such as health insurance and electricity to now be the leading source of cost of living pressure.

Following OPEC’s November 2016 production cut announcement, the price of Brent crude oil has risen from $US46 a barrel to $US80 last month.

“A price between $US50 and $US60 a barrel is probably what both producers and consumers could live with,” Mr James said.

Aussie motorists are feelling the pinch with rising petrol prices.

In the first half of 2017, when Brent traded in that range and the US-dollar exchange rate was comparable to today, unleaded cost only $1.25 to $1.30 a litre — about 25c/L below current prices.

There is growing pressure on OPEC nations to increase production. Non-OPEC countries which joined the supply restraint, such as Russia, want output revived. A meeting between the cutback countries is set for June 22 in Vienna, OPEC’s global headquarters.

OPEC was contacted prior to publication, as was the UAE’s Embassy in Canberra. Neither responded.

The UAE Government bought Salvator Mundi — a 500-year-old oil painting of Jesus — for $US450 million ($590 million) in November last year. It will be displayed at Louvre Abu Dhabi. The museum has reportedly cost $2.6 billion to set up, including $690 million just for the name.

Mr Sims said the best way to fight back against high petrol prices was to use a phone app to identify when and where to buy fuel at the lowest price. Only about a third of motorists are actively shopping around, research shows.

Separately, the ACCC on Tuesday released its quarterly report on the Australian petrol market, which said consumers continue to embrace apps and that petrol prices were high but stable.

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