The guide to the Oilcode
for industry participants in the
downstream petroleum retail industry
Australian Competition and Consumer Commission
23 Marcus Clarke Street, Canberra, Australian Capital Territory, 2601
© Commonwealth of Australia 2011
This work is copyright. Apart from any use permitted by the Copyright Act 1968, no part
may be reproduced without prior written permission from the Commonwealth available
through the Australian Competition and Consumer Commission. Requests and inquiries
concerning reproduction and rights should be addressed to the Director Publishing,
Australian Competition and Consumer Commission, GPO Box 3131, Canberra ACT 2601
or by email to [email protected].
Important notice
This guideline gives you basic information. It does not cover the whole of the
Competition and Consumer Act, including the Oilcode, and is not a substitute
for professional advice.
Moreover, because it avoids legal language wherever possible there may be some
generalisations about the application of the Act. Some of the provisions referred to have
exceptions or important qualifications. In most cases the particular circumstances of the
conduct need to be taken into account when determining the application of the Act.
ISBN 978 1 921964 39 8
ACCC 08/11_46524_399
www.accc.gov.au
iii
On 1 March 2007 the Australian Government implemented the Trade Practices
(Industry Codes—Oilcode) Regulations 2006 (the Oilcode). The Oilcode forms a
part of the Downstream Petroleum Reform Package comprising the:
• repeal of the Petroleum Retail Marketing Sites Act 1980
• repeal of the Petroleum Retail Marketing Franchise Act 1980
• prescription of the mandatory Oilcode under s. 51AE of the Trade Practices Act
1974 (now the Competition and Consumer Act 2010 (the Act)).
Once an industry code of conduct is prescribed by the Australian Government
under the Act, the code has the force of law. The Oilcode, as a prescribed mandatory
industry code of conduct, is binding on all participants in the downstream petroleum
retail industry.
The purpose of the Oilcode is to regulate the conduct of suppliers, distributors
and retailers in the downstream petroleum retail industry. The Oilcode encourages
greater transparency of terminal gate pricing and fuel re‑selling agreements, greater
certainty for industry participants regarding supply of petroleum products and
tenure under fuel-selling agreements. the Oilcode also provides an effective and
relatively inexpensive way of resolving disputes that may arise between suppliers,
distributors or retailers.
The ACCC plays an important role in the downstream petroleum retail
industry by promoting compliance with the Oilcode and the Act. It achieves
this through education, providing access to information and, where necessary,
enforcement action.
This guide is one of several ACCC guides for business. It is designed to help you
understand your rights and responsibilities under the Oilcode.
FOREWORD Foreword
v
CONTENTS
Foreword iii
Glossary 1
Introduction 3
Who does the Oilcode apply to? 4
Wholesale supply of declared petroleum products 4
Health and safety requireme‑nts 5
Terminal gate pricing 5
Term contracts in force at the commencement date of the Oilcode 6
Term contracts entered into after the commencement date of the Oilcode 6
Non-term contracts 6
Disclosing terminal gate price 6
Required documentation 7
Within 30 days of delivery 7
Other statutory obligations 8
Fuel re‑selling agreements 8
Disclosure requirements of a fuel re‑selling agreement 9
Long-form disclosure 11
Short-form disclosure 11
Transfer disclosure 11
Conditions of a fuel re‑selling agreement 12
Cooling-off period 12
Supplier to provide a copy of the lease 12
Association of retailers 12
Prohibition on general release from liability 13
Marketing and other cooperative funds 13
Disclosure of materially relevant facts 13
Making the current disclosure document available 14
Supplier’s proprietary fuel card 14
Duration of agreement 14
Renegotiation or variation of a fuel re‑selling agreement 16
Transfer of the fuel re‑selling agreement 16
vi
Termination of fuel re‑selling agreement 17
Termination by supplier: breach by retailer 17
Termination by supplier: special circumstances 17
Agreed early termination 18
Expiry 19
Dispute resolution scheme 19
Disputes about supply of a declared petroleum product: failure to supply 20
Disputes other than a failure to supply 20
Conditions of using the dispute resolution scheme 21
Legal recourse 22
The role of the ACCC in relation to the Oilcode 22
Developing a compliance program 23
APPENDIX A: long-form disclosure 25
APPENDIX B: short-form disclosure 29
APPENDIX C: transfer disclosure 31
Contacts 33
1
Commission agency: includes a fuel re‑selling agreement under which the retailer
sells motor fuel at retail as an agent of the supplier.
Customer: a person engaged in the business of retailing or wholesaling declared
petroleum products or an associate of that person.
Dealer council: an organisation made up of a supplier and a representative body of
retailers with whom the supplier has fuel re‑selling agreements.
Declared petroleum product: any of the following temperature corrected
motor fuels:
• unleaded petrol
• a product consisting of a blend of unleaded petrol and ethanol
• a product consisting of a blend of unleaded petrol and one or more bio-fuels
other than ethanol
• premium unleaded petrol (other than premium unleaded petrol proprietary
product)
• diesel fuel other than a diesel proprietary product.
DRA: Dispute Resolution Adviser
Fuel re‑selling agreement: a contractual arrangement (either written, verbal or
implied) between a supplier and a retailer that provides for a minimum duration and
has the following characteristics:
• one party (the supplier) grants another party (the retailer) the right to conduct a
fuel re‑selling business and the supplier is able to exert substantial control over
the operation of that business
GLOSSARY Glossary
2 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
• the fuel re‑selling business will be associated with a trademark, commercial
symbol or advertising owned, used, licensed or specified by the supplier
• the retailer is required to pay, or agree to pay, a fee before starting business.
If a commission agency agreement meets the above criteria they are specifically
identified as ‘fuel re‑selling agreements’ under the Oilcode.
Fuel re‑selling business: a business that is subject to, or intended to be subject to, a
fuel re‑selling agreement.
Retailer: includes the following:
(a) a person who carries on a business of selling or supplying petroleum products to
end-users
(b) a person who is a retailer under a fuel re‑selling agreement
(c) a person who, otherwise than as a retailer, participates in a fuel re‑selling
agreement as a retailer.
Spot sale: a sale by wholesale of a declared petroleum product to an uncontracted
customer by a wholesale supplier of the declared petroleum product.
Supplier: includes the following:
(a) a person who is a supplier under a fuel re‑selling agreement
(b) a person who, otherwise than as a supplier, participates in a fuel re‑selling
agreement as a supplier.
Temperature corrected: the assessment of the volume of a declared petroleum
product by reference to the number of litres that the declared petroleum product
occupies, or would occupy, at a temperature of 15ºC.
Term contract: a contract between a customer and a wholesale supplier that sets out
the price at which, and the conditions under which, the customer will buy a declared
petroleum product for a fixed period.
Terminal gate price (TGP): the price for a wholesale sale of a declared petroleum
product that is worked out on a temperature corrected basis and expressed in cents
per litre.
Wholesale supplier: a person who sells declared petroleum products by wholesale
from a wholesale facility.
3
INTRODUCTION Introduction
This publication aims to provide industry participants with a guide to their rights and
responsibilities under the Oilcode.
The Oilcode aims to improve transparency in wholesale pricing and access to
declared petroleum products, as defined in the Oilcode, at a published terminal
gate price.
The Oilcode will also help industry participants make informed decisions when
entering, renewing or transferring a fuel re‑selling agreement through the disclosure
of specific information.
The Oilcode also aims to improve the operating environment for all industry
participants by providing access to a cost-effective and timely dispute resolution
scheme as an alternative to litigation.
This publication examines:
• who the Oilcode applies to
• when the Oilcode will apply
• the rights and responsibilities of industry participants regarding terminal gate
pricing and related arrangements
• the rights and responsibilities of industry participants regarding the wholesale
supply of declared petroleum products
• the type of information industry participants are entitled to
• the rights and responsibilities of parties when entering, transferring or renewing
a fuel re‑selling agreement
• the rights and responsibilities when terminating a fuel re‑selling agreement
• what to do when things go wrong
4 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
• how to contact the Dispute Resolution Adviser
• how to contact the Department of Industry, Tourism and Resources
• how to contact the ACCC
It is important to note that this document is only intended to form a guide for
industry participants about their rights and responsibilities under the Oilcode. It is
not a substitute for legal advice, nor is it intended to comprehensively encapsulate
the rights and/or responsibilities of industry participants under the Oilcode.
Who does the Oilcode apply to?
The Oilcode applies to:
• wholesale suppliers
• sales of declared petroleum products by a wholesale supplier to a customer
• fuel re‑selling agreements, including existing agreements, except those where:
–– the supplier reasonably believes that the amount of motor fuel supplied will
be less than an average of 30 000 litres for each month for the term of the
agreement and
–– at least three days before entering the agreement, the supplier provides the
prospective retailer with a written statement setting out the grounds for
this belief
• any other retail activities included in the fuel re‑selling agreement, or undertaken
on the same site by the retailer for the supplier.
Wholesale supply of declared petroleum products
Under the Oilcode a wholesale supplier is a person who sells declared petroleum
products by wholesale from a wholesale facility. A wholesale facility means:
• oil refinery
• shipping facility
• facility connected by a product transfer pipeline to an oil refinery or a
shipping facility
• facility connected by a product transfer pipeline to a facility that is connected by
a product transfer pipeline to an oil refinery or a shipping facility.
The guide to the Oilcode for industry participants in the downstream petroleum retail indu stry 5
A wholesale supplier must not unreasonably refuse to supply a declared petroleum
product to a customer. However, there are certain conditions under which the
wholesale supplier is not required to supply a declared petroleum product to a
customer. Those conditions include when the wholesale supplier has:
• insufficient supplies
• a reasonable belief that a customer is unable to pay for the supply to meet the
customer’s requirements
• a reasonable belief that the customer is unable to receive or transport the
declared petroleum product in compliance with occupational health and safety
requirements
• advertised a minimum amount of declared petroleum product that the supplier
will supply as a spot sale (a sale by wholesale to an uncontracted customer).
The wholesale supplier is not required to accept a request for the supply of an
amount of the declared petroleum product that is less than the minimum amount.
Health and safety requirements
The Oilcode requires that industry participants comply with all health and safety
requirements when transporting declared petroleum products by road. Information
regarding the specific details of health and safety requirements can be obtained
from the authority appointed in the relevant state or territory. A list of appointed
authorities and their contact details can be found at the National Transport
Commission website at www.ntc.gov.au.
Terminal gate pricing
The terminal gate price (TGP) is the price for a wholesale sale of a declared
petroleum product that is temperature corrected to 15ºC and expressed in cents per
litre. A posted TGP must not include any amount imposed for (or in relation to) an
additional service. Charges for additional services must be identified separately from
the posted TGP in a wholesale supplier’s sales documents.
However, a wholesale supplier:
• may charge the posted TGP minus an amount subtracted as a discount
• may provide an additional service and may charge the posted TGP plus an
additional amount added for or in relation to that service.
6 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
Term contracts in force at the commencement date
of the Oilcode
For term contracts in force at the commencement date of the Oilcode, if a customer
asks the wholesale supplier to offer the option of buying a declared petroleum
product at the posted TGP or at a price derived from that price, and it would not
disadvantage the wholesale supplier, the wholesale supplier must make that offer.
However, a customer may only make one such request and it must be made within
60 days of the commencement of the Oilcode.
Term contracts entered into after the commencement
date of the Oilcode
For term contracts entered into after the commencement date of the Oilcode,
a wholesale supplier must offer the customer the option of buying the declared
petroleum product at the posted TGP or at a price derived from that price.
Non-term contracts
For non-term contracts entered into after the commencement date of the Oilcode,
a wholesale supplier must make the customer an offer to buy the declared petroleum
product at the posted TGP or a price derived from that price.
Disclosing terminal gate price
The Oilcode specifies that all wholesale suppliers who sell to non-related parties
must publicly advertise the TGP each day for the wholesale sale of declared
petroleum products, for example a sale by a refiner to a retailer or a distributor.
A wholesale supplier must make its terminal gate prices available to the public each
day on an internet website or, if this is not possible, from a telephone or facsimile
service operated by or for the wholesale supplier.
The only exception to this advertising requirement is when one or more related
body corporate entities is selling declared petroleum products by wholesale from a
wholesale facility. Under these circumstances, only one of the related body corporate
entities is required to post a TGP. A posting by one of the related body corporate
entities will satisfy this requirement for the group of companies.
The guide to the Oilcode for industry participants in the downstream petroleum retail indu stry 7
The Oilcode further specifies that a wholesale supplier may post more than one
terminal gate price on a day, however this may only be done where it is clear that
only one price is in effect at any time and that the new price supersedes all other
prices previously identified on that day.
Required documentation
At the time of delivery
At the time of delivery a wholesale supplier must provide to the customer a
document that acknowledges the sale of the declared petroleum product and
includes at least:
(i) the kind of declared petroleum product supplied
(ii) the volume of the declared petroleum product supplied, on a temperature
corrected basis
(iii) the total price charged per litre on a temperature corrected basis
(iv) the posted TGP applicable at the time of the transaction
If the customer has access to the information in (iii) or (iv) above from a telephone,
a fax or a website operated by or for the wholesale supplier at the time of the sale,
the information in (iii) or (iv) does not have to be included in the documentation at
the time of delivery.
Within 30 days of delivery
Within 30 days of delivery the wholesale supplier must also provide the customer
with a document acknowledging the sale which includes certain further information
regarding that sale. The following information must be included in the document
acknowledging the sale:
• the wholesale supplier’s name
• the customer’s name
• the date of the transaction
• the kind of declared petroleum product supplied
• the volume of declared petroleum product supplied worked out on a temperature
corrected basis
• the posted TGP applicable at the time of the transaction
• the total price charged for the sale, worked out on a temperature corrected basis
8 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
• if the customer has requested additional services with the supply:
–– a description of each service
–– the price charged for each service
• if the wholesale supplier has given a discount:
–– the amount of the discount
–– the way in which the discount was applied.
Other statutory obligations
There are a range of other Commonwealth, state and territory statutory obligations
that operate concurrently with the Oilcode which may affect industry participants
regarding the wholesale supply of petroleum products. For further information
about relevant state and territory legislation, industry participants may wish to
consult the following Australian Government website that provides links to all
Australian state and territory government websites, www.australia.gov.au.
Fuel re‑selling agreements
A fuel re‑selling agreement is a contractual arrangement between a supplier and a
retailer that provides for a minimum duration and has the following characteristics:
(i) the agreement may be written, verbal or implied and
(ii) one party (the supplier) grants another party (the retailer) the right to conduct a
fuel re‑selling business and the supplier is able to exert substantial control over
the operation of that business and
(iii) the fuel re‑selling business will be associated with a trademark, advertising or
commercial symbol owned, used, licensed or specified by the supplier and
(iv) the retailer is required to pay, or agree to pay, a fee before starting business
(with the exception of a commission agency type fuel re‑selling agreement).
If a commission agency agreement meets the above criteria (i), (ii) and (iii) they are
specifically identified as ‘fuel re‑selling agreements’ under the Oilcode.
The transfer, renewal or extension of a fuel re‑selling agreement, a commission
agency relationship under the Oilcode or an interest in a fuel re‑selling agreement
will constitute a fuel re‑selling agreement for the purposes of the Oilcode.
The guide to the Oilcode for industry participants in the downstream petroleum retail indu stry 9
However, any of the following commercial relationships do not of themselves
constitute a fuel re‑selling agreement:
• an employer and employee relationship
• a partnership relationship
• a landlord and tenant relationship
• a mortgagor and mortgagee relationship
• a lender and borrower relationship
• a fuel agreement related to a retail site that is not owned or leased by the supplier
• the relationship between the members of a cooperative that is registered,
incorporated or formed under state or federal law.
It should be noted that a fuel re‑selling agreement may apply to one or more
retail sites.
Disclosure requirements of a fuel re‑selling
agreement
The supplier must create and maintain a disclosure document that ensures adequate
information is provided by the supplier to allow the retailer to make a reasonably
informed decision on the proposed terms and conditions of the fuel re‑selling
agreement. The disclosure document must be signed by a director or executive
officer of the supplier. The supplier must also give a retailer current information
relevant to the operation of their business. The supplier must not seek a nonrefundable
deposit from the retailer in exchange for a disclosure document.
A supplier must give its current disclosure document and a copy of the Oilcode in
either electronic or hardcopy form to a person who proposes to:
• become a retailer in relation to the supplier at least 14 days before the person
enters into the fuel re‑selling agreement or pays any non-refundable money to a
supplier in connexion with a proposed fuel re‑selling agreement or
• renew or extend a fuel re‑selling agreement, in relation to the supplier at least
14 days before the fuel re‑selling agreement is renewed or extended.
The disclosure document must be in accordance with the form, the order and
the numbering set out in the annexure of the Oilcode that relates to that fuel
re‑selling agreement.
10 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
If the agreement is a new fuel re‑selling agreement (not a renewal, extension or
transfer), the retailer will be entitled to a seven-day ‘cooling off ’ period after signing
the agreement or paying money under the agreement, whichever is the earlier.
During this time the retailer may terminate the agreement without cost in certain
circumstances (see p. 19 for further details).
The supplier must also create subsequent disclosure documents not later than three
months after the end of:
• the financial year in which the supplier enters into the fuel re‑selling agreement
• each subsequent financial year in which a fuel re‑selling agreement is in force.
A supplier must not enter into a fuel re‑selling agreement or receive non-refundable
money under a fuel re‑selling agreement before receiving a signed statement from
the prospective retailer that they have:
• received, read and had a reasonable opportunity to understand the disclosure
document and the Oilcode
• been given legal advice from an independent professional adviser about the
proposed fuel re‑selling agreement, or fuel re‑selling business or has declined to
seek such advice with respect to the agreement.
A supplier must not renew or extend a fuel re‑selling agreement or receive
non‑refundable money under a fuel re‑selling agreement before receiving a written
statement from the retailer that they have received, read and had an opportunity to
understand the disclosure document from the wholesale supplier and the Oilcode.
There are two types of disclosure documents associated with fuel re‑selling
agreements that are required to be created and maintained by a supplier under the
Oilcode: These include:
• Long-form disclosure: a comprehensive level of disclosure required for
agreements for five years or more.
• Short-form disclosure: a less comprehensive form of disclosure required
for agreements for less than five years. However, a retailer may also request
the supplier to provide the additional information provided under a supplier’s
long‑form disclosure obligations for agreements with less than five years duration
if it chooses to do so.
The guide to the Oilcode for industry participants in the downstream petroleum retail indu stry 11
Long-form disclosure
A supplier proposing to enter, renew or extend a fuel re‑selling agreement of at
least five years duration must provide long-form disclosure documentation in
accordance with the specific content and layout requirements listed in annexure 1 of
the Oilcode. The long-form disclosure document includes issues of relevance to the
commercial viability of the fuel re‑selling business. You will find a summary list of
these disclosure requirements in appendix A of this guide.
Short-form disclosure
A supplier proposing to enter, renew or extend a fuel re‑selling agreement for less
than five years may choose to provide short-form disclosure documentation in
accordance with the specific content and layout requirements listed in annexure 2 of
the Oilcode. The short-form disclosure document includes issues of relevance to the
commercial viability of the fuel re‑selling business. You will find a summary listing
of these disclosure requirements in appendix B of this guide.
Transfer disclosure
A person who proposes to transfer a fuel re‑selling agreement must create and
maintain a disclosure document in accordance with the specific content and layout
requirements listed in annexure 3 of the Oilcode. This short-form disclosure
document includes issues of relevance to the commercial viability of the fuel
re‑selling business. A summary of these disclosure requirements is provided in
appendix C of this guide.
The disclosure document must be given to the proposed transferee and to the
supplier. The transferor must also give to the supplier details of the consideration
for the proposed sale and all details reasonably required by the supplier to decide
whether to consent to the transfer. The document must also be signed by a director
or an executive officer of the transferor.
An exception to this requirement is if the proposed transferee is the supplier of the
fuel re‑selling business. If this is the case, the supplier may waive the requirement to
be given the disclosure document.
The supplier must provide the proposed transferee with access to information to
test the reasonableness of the claims made about the financial details of the fuel
re‑selling business within the disclosure document of the transferor.
12 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
Conditions of a fuel re‑selling agreement
A fuel re‑selling agreement is subject to the following conditions.
Cooling-off period
The Oilcode provides that a prospective retailer is entitled to a cooling-off period
of seven days after entering into a new fuel re‑selling agreement (not a renewal,
extension or transfer) or paying any money under the agreement, whichever occurs
earlier. In the event that the retailer terminates the agreement within the cooling
off period the supplier must fully refund all money paid by the retailer under the
agreement within 14 days. However, the supplier may deduct its reasonable expenses
from the amount to be repaid if the expenses, or the method of calculation of the
expenses, have been set out in the agreement.
Supplier to provide a copy of the lease
When the retailer leases premises from a supplier for a fuel re‑selling business, the
supplier must give the retailer a copy of the lease or the agreement to lease within
one month after the document is signed by the parties.
Similarly, when a retailer occupies premises leased by the supplier, the supplier
is required to provide a copy of the lease to the retailer within one month after
occupation or give to the retailer a copy of the documents that give the retailer
a right to occupy the premises within one month of the signing of those.
The supplier must also give the retailer written details of the conditions of
occupation within one month after occupation.
Association of retailers
A supplier is prohibited from inducing a retailer not to form an association for a
lawful purpose. A supplier is also prohibited from inducing a retailer not to associate
with other retailers for a lawful purpose.1
1 It may be unlawful for retailers to meet with other retailers who are competitors for the purpose of fixing,
controlling or maintaining the price that they will charge for a product.
The guide to the Oilcode for industry participants in the downstream petroleum retail indu stry 13
Prohibition on general release from liability
A fuel re‑selling agreement entered into after the commencement of the Oilcode
must not contain, or require a retailer to sign, a general release of the supplier from
liability towards the retailer. However, this does not prevent a retailer from settling
a claim against the supplier on terms that include a general release from liability
towards the retailer for the claim after entering into a fuel re‑selling agreement.
Marketing and other cooperative funds
If a fuel re‑selling agreement requires a retailer to pay money to a marketing fund,
the supplier must:
• prepare an annual financial statement of the fund’s receipts and expenses within
three months of the end of the financial year
• have the statement audited by a registered company auditor within three months
of the end of the financial year to which it relates (unless 75 per cent of the
supplier’s retailers in Australia, who contribute to the fund, agree that this is not
required)
• if the retailer requests it, give a copy of the statement to the retailer within
30 days of the request.
Disclosure of materially relevant facts
If they are not already mentioned in the disclosure document, the supplier must
disclose issues listed in the Oilcode as materially relevant facts within 14 days of the
supplier becoming aware of the facts. Materially relevant facts include:
• a change in the majority ownership of the supplier
• details of certain criminal and civil legal proceedings
• an award in arbitration against the supplier
• court enforceable undertakings given by the supplier to a public agency and
insolvency matters.
14 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
Making the current disclosure document available
The supplier must provide a retailer with a current disclosure document within
14 days of a retailer’s written request. A retailer can request a disclosure document
only once in any 12-month period. However, a disclosure document provided
in accordance with a request under a right of renewal does not prevent retailers
exercising their right to request and receive a further disclosure document within the
12-month period since the last document was provided.
Supplier’s proprietary fuel card
If a retailer must accept a supplier’s proprietary fuel card for purchases, and
reimbursement for the purchase is payable directly into the retailer’s bank account,
the supplier must reimburse a retailer for EFT purchases within three business days
after the supplier receives details of the transaction. The supplier must reimburse a
retailer within five business days for non-EFT purchases or where reimbursement is
not payable directly into the retailer’s bank account.
Duration of agreement
The Oilcode specifies the required duration for different types of existing and new
fuel re‑selling agreements.
A fuel re‑selling agreement entered into before the commencement date of
the Oilcode must retain the duration specified in that agreement, including any
arrangements for renewal of the agreement. If the agreement was previously
covered by the Petroleum Retail Marketing Franchise Act 1980, the duration and
renewal arrangements must be those specified in that Act.
A fuel re‑selling agreement entered into on or after the commencement date of the
Oilcode must have duration of at least five years, unless:
(i) the fuel re‑selling agreement relates to a retail site owned or leased by the supplier
and requires the retailer to buy fuel from the supplier or gives the supplier an
entitlement to sell fuel to the retailer. In this circumstance, the agreement must
also contain at least one option to renew for at least a further four years (at least
nine years in total).
The guide to the Oilcode for industry participants in the downstream petroleum retail indu stry 15
(ii) the supplier and the prospective retailer agree on a different duration for a fuel
re‑selling agreement where:
• the site on which the fuel re‑selling business is carried on is leased under
a lease that will expire within five years after the fuel re‑selling agreement
commences or, if (i) above applies, within nine years after the fuel re‑selling
agreement commences or
• the supplier has decided that within five years after the fuel re‑selling
agreement commences or, if (i) above applies, within nine years after the fuel
re‑selling agreement commences, it will:
–– lease, dispose of or operate the retail site, associated with the fuel re‑selling
agreement, for a purpose other than the retail sale of motor fuel or
–– the initial upfront investment paid by the prospective retailer, such as for
goodwill or ‘key money’, is less than $20 000.
Option to renew
A supplier must honour an option to renew a fuel re‑selling agreement entered
into before or after the commencement date of the Oilcode. An exception to this
requirement is when the supplier has decided that the retail site associated with the
fuel re‑selling agreement is to be disposed of, leased or otherwise used for a purpose
other than the retail sale of motor fuel.
A retailer who proposes to exercise an option to renew a fuel re‑selling agreement
must request a disclosure document from the supplier at least 60 days and not more
than 120 days before the expiration of the current term of the agreement.
When a fuel re‑selling agreement is renewed, the Oilcode requires that:
• the supplier must provide the appropriate disclosure document (either long or
short depending on the length of the renewal) to the retailer
• any changes to the terms of the conditions of the agreement must be reasonable
and in good faith.
If a retailer and a supplier enter into a fuel re‑selling agreement for a different
duration for reasons other than those provided for within the Oilcode, the
agreement is taken to have the duration prescribed under the Oilcode for that type
of agreement (i.e. five or at least nine years).
If the supplier and retailer agree to terminate a fuel re‑selling agreement before it
would otherwise expire, the supplier and another retailer may enter into a temporary
agreement for that site covering the duration of the agreement. The duration of a
temporary agreement may not exceed six months.
16 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
Where a supplier and retailer cannot agree on the terms and conditions of the
renewal of an agreement, or the supplier fails or refuses to renew an agreement, the
DRA may be able to assist the parties to resolve a dispute.
Renegotiation or variation of a fuel re‑selling
agreement
The terms of a fuel re‑selling agreement may be renegotiated by a party when:
• the operation of the fuel re‑selling agreement is substantially affected by a matter
that is within the control of the other party and
• the matter was not disclosed by the other party and
• the occurrence of that matter was not reasonably foreseen by either party to
the agreement.
A party to the fuel re‑selling agreement may vary a term of the agreement or exercise
a discretion under the agreement without the consent of the other party if the
original fuel re‑selling agreement allows for such a right to be exercised unilaterally.2
If a dispute arises in relation to renegotiation, variation or a discretion exercised
under a fuel re‑selling agreement the assistance of the Dispute Resolution Adviser
(DRA) may be requested. If the parties are still unable to resolve the issue with
assistance from the DRA, the retailer may require that the supplier offer to terminate
the fuel re‑selling agreement in accordance with the termination by supplier – special
circumstances procedures of the Oilcode.
Transfer of the fuel re‑selling agreement
The Oilcode provides for the transfer of a fuel re‑selling agreement to a third party
and sets out the circumstances under which it would be reasonable for the supplier
to refuse to consent to the proposed transfer.
The circumstances that are considered reasonable for a supplier to refuse the transfer
of a fuel re‑selling agreement include when:3
• the proposed transferee is unlikely to meet the financial obligations of the fuel
re‑selling agreement
2 It should be noted that in some circumstances the way in which such a term is used by the party relying on that
term may be subject to judicial consideration for the purposes of an allegation of unconscionable conduct against
that party.
3 Discretion should not be exercised unconscionably.
The guide to the Oilcode for industry participants in the downstream petroleum retail indu stry 17
• the proposed transferee does not meet the selection criteria set out in the
disclosure document
• the retailer has not met the disclosure obligations set out in p. 13 of this guide
• the proposed transferee does not agree in writing to comply with the obligations
of a retailer under the fuel re‑selling agreement
• the retailer has not paid or made a reasonable provision to pay amounts owing to
the supplier
• the retailer is in breach of the fuel re‑selling agreement and has not remedied the
breach.
The supplier is taken to have given consent to the transfer if the supplier does not
object to the transfer in writing within 42 days.
Termination of fuel re‑selling agreement
Termination by supplier: breach by retailer
If a retailer is in breach of the fuel re‑selling agreement, a supplier must give the
retailer reasonable notice that the supplier proposes to terminate the agreement
because of the breach, notify the retailer of what needs to be done to remedy the
breach and give the retailer reasonable time to remedy the breach. If the breach
is remedied within the prescribed timeframe then the supplier must not proceed
with the termination as a result of that breach unless special circumstances apply
(outlined below). If the parties are still unable to reach agreement the DRA may be
of assistance to reach an agreement.
Termination by supplier: special circumstances
The Oilcode sets out the special circumstances under which a supplier is not required
to provide a retailer with the right to remedy a breach before proceeding to terminate
a fuel re‑selling agreement.
Such circumstances include:
• failure to hold a licence that the retailer is required to hold to conduct a fuel
re‑selling business
• bankruptcy or insolvency
• voluntarily abandonment of the fuel re‑selling business
18 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
• conviction of a serious offence or
• operating the fuel re‑selling business or an associated business in a way that is
fraudulent or that endangers public health or the environment.
A supplier may also terminate a fuel re‑selling agreement relating to particular retail
premises if a Commonwealth, state or territory law relating to the compulsory
acquisition of land is invoked or the sale of motor fuel at the premises is prohibited
by a law relating to the use of land.
Termination by supplier of a fuel re‑selling agreement that does
not specify a minimum duration and the initial upfront investment
is less than $20 000
A supplier intending to terminate a fuel re‑selling agreement that does not specify
a minimum duration and the initial upfront investment is less than $20 000 must
give the retailer at least 30 days notice and offer to buy, or nominate a buyer for a
reasonable quantity of saleable stocks of motor fuel, merchandise and equipment
supplied under the supplier’s fuel re‑selling agreement or operational specifications,
or obtained with the supplier’s approval. The retailer must also make reasonable
efforts to sell the stock and equipment.
If the parties are unable to reach agreement on appropriate compensation for
termination under this section, the DRA may be of assistance.
Agreed early termination
If the retailer and supplier agree to terminate a fuel re‑selling agreement before it
expires, the supplier must notify the retailer that:
• the retailer has rights under the fuel re‑selling agreement and
• the supplier will negotiate an arrangement with the retailer to terminate those
rights by consent and
• the retailer should seek independent financial and legal advice about any offer
made by the supplier.
The supplier must also offer to pay costs relating to the termination of the fuel
re‑selling agreement, which may include, depending on the terms of the agreement,
a proportional refund of any fees paid to the supplier by the retailer.
The guide to the Oilcode for industry participants in the downstream petroleum retail indu stry 19
The supplier must also offer to buy or nominate a buyer for a reasonable quantity of
saleable stocks of:
• motor fuel
• merchandise and
• equipment
supplied under the supplier’s fuel re‑selling agreement, operational specifications or
obtained with the supplier’s approval.
The retailer must also make reasonable efforts to sell the stock and equipment. If the
parties are unable to reach agreement on appropriate compensation for termination
under this section, the DRA may be of assistance.
Expiry
At least 60 days before the expiry of a fuel re‑selling agreement, the supplier
and retailer must discuss the procedures that will apply to settle the commercial
arrangements between the supplier and the retailer.
On expiry of an agreement the supplier must offer to buy or nominate a buyer for
a reasonable quantity of saleable stocks of motor fuel, merchandise and equipment
supplied under the supplier’s fuel re‑selling agreement, operational specifications or
obtained with the supplier’s approval.
Dispute resolution scheme
The key objective of the dispute resolution scheme is to provide the downstream
petroleum retail industry with a cost-effective and timely dispute resolution
scheme as an alternative to litigation. The DRA plays an essential role in facilitating
this process.
The dispute resolution scheme applies to disputes arising:
• when a wholesale supplier fails to supply a declared petroleum product to a
customer
• between the parties to a fuel-reselling agreement
• in relation to any of the provisions of the Oilcode about terminal gate price
arrangements or a fuel re‑selling business.
20 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
The scheme does not apply to disputes relating to pricing issues, such as allegations
of predatory pricing activities and concerns about below cost selling of declared
petroleum products.
The DRA may make non-binding determinations for industry disputes under the
Oilcode. However, it is important to note that the dispute resolution scheme does
not prohibit anyone from coming directly to the ACCC or from taking private legal
action for a breach of the Oilcode or the Act. Any statement made as part of the
dispute resolution procedures under the Oilcode is not admissible in a criminal
proceeding or a proceeding for the imposition of a penalty. The only exception to
this is for a proceeding in respect of the falsity of the statement.
Disputes about supply of a declared petroleum
product: failure to supply
The parties may involve the DRA directly in resolving disputes for failure to supply
with a view to a timely resolution.
If a supplier fails to supply a customer with a declared petroleum product, the
customer may:
• notify the DRA
• ask the DRA to attempt to resolve the dispute and
• provide details and evidence of their complaint to the DRA.
In this situation, the DRA may seek copies of the wholesale supplier’s records
regarding the failure to supply. The wholesale supplier must comply with the
DRA’s request and give the records to the DRA as soon as practicable but within
six hours of the request.
Disputes other than a failure to supply
With respect to disputes that do not relate to a failure to supply declared
petroleum products, the Oilcode requires that the parties must attempt to agree
about how to resolve the dispute, unless the DRA is satisfied that there is no
reason to attempt negotiation.
If the parties attempt to agree how to resolve the dispute, they may agree to appoint
a person to mediate or provide assistance in resolving the dispute. The person
appointed must in turn inform the DRA of arrangements they have put in place
to assist the parties to resolve the dispute.
The guide to the Oilcode for industry participants in the downstream petroleum retail indu stry 21
Alternatively, if the parties cannot agree to refer the matter, the parties must notify
the DRA of this, and the DRA must appoint a person to provide mediation or
other assistance to resolve the dispute. If the DRA appoints a person to mediate the
dispute or provide assistance, the parties must try to resolve the dispute with the help
of the person appointed. Either party to the dispute may, with the agreement of the
person appointed by the DRA, involve another party to assist or provide advice.
Only the original parties to the dispute may enter into an agreement to resolve
the dispute.
The DRA may comment on any advice provided by the person they appointed to
mediate or assist the parties to resolve the dispute. The DRA may also choose to
make a non-binding determination about the dispute. If a resolution cannot be
reached within 30 days of the start of arrangements to resolve the dispute, the
parties may choose to stop using the services of the person appointed by the DRA.
Conditions of using the dispute resolution scheme
The dispute resolution scheme cannot be used to resolve a dispute as to whether
a retailer:
• no longer holds a licence that the retailer requires to conduct a fuel
re‑selling business
• has become bankrupt, insolvent under administration or an externally
administered body corporate
• has voluntarily abandoned the fuel re‑selling business
• has been convicted of a serious offence or
• has agreed to the termination of the fuel re‑selling agreement.
The Oilcode specifies that, unless otherwise agreed, the parties are equally liable
for the costs of mediation or other assistance to resolve the dispute. However, each
party is liable to pay their own costs of attending meditation.
If you want to lodge a dispute or seek further information about the Dispute
Resolution Adviser visit www.oilcodedra.com.au.
22 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
Legal recourse
Any action taken under the dispute resolution scheme of the Oilcode does not affect
the right of a party to a dispute to bring their own legal proceedings.
When a retailer or a supplier believes that there has been a serious breach of the
Oilcode the affected party may be entitled to damages, court orders to stop the
contraventions or other orders, such as orders requiring changes to the agreement.
Industry participants should seek legal advice from a solicitor on these issues.
However, legal action can be costly, time consuming, relationship damaging and
without guarantee that the court will provide the desired outcome. Often, it may be
more practical to try to resolve the dispute through the dispute resolution scheme
provided by the Oilcode.
Note that the scheme does not prevent anyone from approaching the ACCC directly,
nor from taking other forms of private legal action.
The role of the ACCC in relation to the Oilcode
The ACCC administers:
• section 51AD of the Act that prohibits contraventions by corporations of an
applicable industry code, such as the Oilcode
• section 22 of Schedule 2 of the Act that allows the courts, when determining
whether conduct is unconscionable, to consider the requirements of any
applicable industry code, including the Oilcode.
The ACCC also:
• educates industry participants about their rights and obligations under
the Oilcode
• provides guidance to industry and raises awareness of the Oilcode among
industry participants
• where necessary, enforces the provisions of the Oilcode and other relevant
provisions of the Act by seeking remedies available under the Act.
The guide to the Oilcode for industry participants in the downstream petroleum retail indu stry 23
Although the ACCC records and assesses every complaint it receives, not all
complaints are pursued. The information obtained from individual complainants
is recorded on the ACCC’s complaints database and may be used to establish a
pattern of behaviour by a particular industry participant or by a particular part of an
industry. The ACCC may give priority to complaints that:
• involve a blatant disregard for the law
• will cause significant public detriment
• include unconscionable conduct against small business
The ACCC may take action to:
• clarify the reach and meaning of the Oilcode and the Act
• achieve an outcome that will have an educational or deterrent effect.
The ACCC is likely to direct disputes to the DRA at first instance. However, if an
industry participant has blatantly disregarded the Oilcode or the Act, then the ACCC
may take immediate action.
As part of its policy responsibilities the Department of Resources, Energy and
Tourism (RET) provides policy advice and support to the Australian Government
on issues relating to the retail petroleum industry. You can find further information
regarding the role of RET at www.ret.gov.au.
Developing a compliance program
The ACCC encourages all industry participants to develop a trade practices
compliance program as a mechanism to reduce the risk of breaching the Oilcode and
the Act and to quickly remedy any breach that may have occurred.
For further information on how to develop an effective compliance program, refer
to the ACCC’s Small business guide to trade practices compliance programs at the ACCC
website, www.accc.gov.au.
24 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
25
APPENDIX A: long-form disclosure
A supplier proposing to enter, renew or extend a fuel re‑selling agreement of at
least five year’s duration must provide long-form disclosure documentation in
accordance with the specific content and layout requirements listed in annexure 1 of
the Oilcode. The long-form disclosure document includes the following issues of
relevance to the commercial viability of the fuel re‑selling business:
details of the supplier, including the qualifications of each director, secretary,
executive officer or partner of the supplier who is likely to have management
responsibilities for the fuel re‑selling agreement
a summary of the relevant business experience of the people running the fuel
re‑selling business
details of litigation over the last three years against the supplier including
proceedings that involve criminal, trade practices and industrial relations
proceedings
payments made to agents who introduce or recruit retailers
details of existing fuel re‑selling agreements
details of any intellectual property significant to the fuel re‑selling agreement
system such as trade marks, patents, designs or copyright
whether the fuel re‑selling business is for an exclusive or non-exclusive territory
or limited to a particular site
whether other retailers may operate a fuel retail business in the designated
territory
APPENDIX A Appendix A
26 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
whether the supplier may operate or establish other fuel re‑selling systems within
the designated territory
whether a retailer may operate a fuel re‑selling business outside the territory
whether the supplier may change the territory
details of goods and services that the retailer acquires or supplies, including
restrictions and obligations on where and what retailers can buy4
how the supplier will deal with motor fuel losses
the supplier’s policy on site selection and details on the history of the site
details of marketing and cooperative funds
details of money that retailers are required to pay before signing the fuel
re‑selling agreement and when such a payment will be refunded
details of establishment costs such as property, equipment, inventory, security
deposits, licences, insurance, working capital and other payments
details of any financing arrangements that the supplier offers to the retailer or
requires the retailer to enter
a summary of the conditions of the agreement that deal with both the
retailer and supplier’s obligations before and during the operation of the fuel
re‑selling business
details of pricing policy, motor fuel delivery and payment
a summary of the requirements for the retailer to prepare a business plan
including a statement of rights and obligations of the supplier and retailer under
the plan
a summary of conditions for use of supplier proprietary fuel cards
details of the right (if any) of the supplier to vary a term of the agreement or
any document adopted by reference, without the consent of the retailer
what ‘type’ of arrangement the fuel re‑selling agreement is—commission agency
or other
how long the current business format of the agreement has been used and how it
has developed
if the retailer is required to use the supplier’s computer system, a summary of the
rights and responsibilities of the supplier and the retailer including the extent to
which the retailer may be excluded from use of the computer system
4 Before some of these requirements are made, the supplier may notify, or seek authorisation from the ACCC
(see Part VII of the Competition and Consumer Act).
The guide to the Oilcode for industry participants in the downstream petroleum retail indu stry 27
conditions of the fuel re‑selling agreement including:
–– termination
–– renewal, extension, variation or expiry
–– selling
–– mediation and conciliation
–– choice of governing law
a statement that re‑selling of motor fuels is subject to Commonwealth and state
or territory laws and that the retailer will be exposed to market risks and rewards
a summary of any requirements under a fuel re‑selling agreement that requires
a retailer to enter into any other agreements such as leases, confidentiality
agreements and mortgages
earnings information may or may not be given; annexure 1 outlines what
information must be included if earnings information is given
financial details of the supplier including financial reports and directors
statements
details of any materially relevant facts that have changed after the disclosure
document is completed but before it is actually given to the retailer
a copy of the Oilcode, the fuel re‑selling agreement, any other proposed activities
under the agreement relating to the sale of declared petroleum products and
any other information the supplier wants to give that does not contradict the
information required
a statement that the retailer may keep the disclosure document and a form that
the retailer may sign to acknowledge receipt of the disclosure document.
28 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
29
APPENDIX B: short-form disclosure
A supplier proposing to enter, renew or extend a fuel re‑selling agreement for less
than five years may choose to provide short-form disclosure documentation in
accordance with the specific content and layout requirements listed in annexure 2 of
the Oilcode. The short-form disclosure document includes the following issues of
relevance to the commercial viability of the fuel re‑selling business:
details of the supplier, including the qualifications of each director, secretary,
executive officer or partner of the supplier who is likely to have management
responsibilities for the fuel re‑selling agreement
details of litigation over the last three years against the supplier including
proceedings that involve criminal, trade practices and industrial relations
proceedings
details of any intellectual property significant to the fuel re‑selling agreement
system such as trade marks, patents, designs or copyright
whether the fuel re‑selling business is for an exclusive or non-exclusive territory
or limited to a particular site
whether other retailers may operate a fuel retail business in the designated
territory
whether the supplier may operate or establish other fuel re‑selling systems within
the designated territory
whether a retailer may operate a fuel re‑selling business outside the territory
whether the supplier may change the territory
details of marketing and cooperative funds
APPENDIX B Appendix B
30 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
details of money that retailers are required to pay before signing the fuel
re‑selling agreement and when such a payment will be refunded
details of establishment costs such as property, equipment, inventory, security
deposits, licences, insurance, working capital and other payments
a summary of the conditions of the agreement that deal with both the retailer’s
and supplier’s obligations before and during the operation of the fuel re‑selling
business
details of pricing policy, motor fuel delivery and payment
a summary of the requirements for the retailer to prepare a business plan
including a statement of rights and obligations of the supplier and retailer
under the plan
a summary of conditions for use of supplier proprietary fuel cards
details of the right (if any) of the supplier to vary a term of the agreement or
any document adopted by reference, without the consent of the retailer
a statement that re‑selling of motor fuels is subject to Commonwealth and state
or territory laws and that the retailer will be exposed to market risks and rewards
financial details of the supplier including financial reports and directors
statements a statement that the prospective retailer:
–– may keep the disclosure document
–– ask the supplier to provide the additional information provided under a
supplier’s long-form disclosure obligations for fuel re‑selling agreements
a form that the retailer may sign to acknowledge receipt of the disclosure
document.
31
APPENDIX C: transfer disclosure
A person who proposes to transfer a fuel re‑selling agreement must create and
maintain a disclosure document in accordance with the specific content and layout
requirements listed in annexure 3 of the Oilcode. The short-form disclosure
document includes the following issues of relevance to the commercial viability of
the fuel re‑selling business:
details of the supplier
details of the retailer including the business experience and qualifications of the
directors of the retailer
a description of the fuel re‑selling business
a copy of the existing fuel re‑selling agreement
if the retailer leases the property and proposes to transfer the lease—a copy of
any lease agreements or agreements to lease or a summary of the conditions of
the lease agreement or agreement to lease
details of the assets of the fuel re‑selling business that will be transferred to the
proposed transferee
profit and loss statements and balance sheets of the fuel re‑selling business for
the past two years
a summary of obligations that the retailer has for the fuel re‑selling business
summary of any conditions that must be met to transfer the fuel re‑selling
business
details of the retailer’s employees
APPENDIX C Appendix C
32 The guide to the Oilcode for industry participants in the downstream petroleum retail industry
a statement that the retailer has provided the information contained within the
disclosure document and that the supplier does not guarantee the accuracy of
the information
an acknowledgment of receipt of the disclosure document
any other information that the retailer wants to give.
33
Adelaide office
GPO Box 922
Adelaide SA 5001
Ph: (08) 8213 3444
Fax: (08) 8410 4155
Brisbane office
PO Box 12241
George Street Post
Shop
Brisbane Qld 4003
Ph: (07) 3835 4666
Fax: (07) 3835 4653
Canberra office
GPO Box 3131
Canberra ACT 2601
Ph: (02) 6243 1111
Fax: (02) 6243 1199
Darwin office
GPO Box 3056
DARWIN NT 0801
Ph: (08) 8946 9666
Fax: (08) 8946 9600
Hobart office
GPO Box 1210
Hobart Tas 7001
Ph: (03) 6215 9333
Fax: (03) 6234 7796
Melbourne office
GPO Box 520
Melbourne Vic 3001
Ph: (03) 9290 1800
Fax: (03) 9663 3699
Perth office
PO Box 6381
Ph: (08) 9325 0600
Fax: (08) 9325 5976
Sydney office
GPO Box 3648
Sydney NSW 2001
Ph: (02) 9230 9133
Fax: (02) 9223 1092
Townsville office
PO Box 2016
Townsville Qld 4810
Ph: (07) 4729 2666
Fax: (07) 4721 1538
For other business information go to www.business.gov.au
CONTACTS Contacts
Dispute Resolution Adviser www.oilcodedra.com.au
ACCC Infocentre 1300 302 502
Small business helpline 1300 302 021
Website www.accc.gov.au
OI