32Duration of agreement

32 Duration of agreement

Fuel re‑selling agreements entered into before 1 March 2007 (1) A fuel re‑selling agreement entered into before 1 March 2007 must retain the duration specified in the agreement and the arrangements (if any) for the exercise of options to renew the agreement.

Note: These regulations are a remake of the Competition and Consumer (Industry Codes—Oilcode) Regulation 2006, which commenced on 1 March 2007.

(2) A fuel re‑selling agreement entered into before 1 March 2007, which is a franchise agreement to which the Petroleum Retail Marketing Franchise Act 1980 applied, and that relates to a retail site, must retain: (a) the duration specified in the agreement; and (b) the arrangements (if any) for the exercise of options to renew the agreement; that were specified in the renewal arrangements set out in that Act. (3) The duration of a fuel re‑selling agreement to which subclause (1) or (2) applies: (a) must not be altered otherwise than in accordance with this code; and (b) must not be altered for a reason that is, in substance, related to: (i) the commencement of the Oilcode set out in Schedule 1 to the Competition and Consumer (Industry Codes—Oilcode) Regulation 2006; or (ii) the repeal of the Petroleum Retail Marketing Franchise Act 1980 or the Petroleum Retail Marketing Sites Act 1980.

Note: If a fuel re‑selling agreement entered into before 1 March 2007 contains a provision allowing the supplier to vary the duration of the agreement (for example subsequent to a change in any law), the duration of that agreement is not to be altered due to the commencement of the Oilcode or the repeal of the specified Acts.

Fuel re‑selling agreements entered into on or after 1 March 2007 (4) A fuel re‑selling agreement entered into on or after 1 March 2007 must have a duration of at least 5 years, unless subclause (5) or (11) applies. (5) A fuel re‑selling agreement entered into on or 1 March 2007 that requires the retailer to purchase fuel from the supplier or that gives the supplier an entitlement to sell fuel to the retailer, and that relates to a retail site owned or leased by the supplier, must have: (a) a duration of at least 5 years; and (b) a further duration, as extended by the exercise of one or more options to renew the agreement, of at least 4 years. Renewal of fuel re‑selling agreements (6) A supplier must not fail or refuse to renew a fuel re‑selling agreement mentioned in subclause (2) or (5) unless the supplier has decided that the supplier will: (a) lease the retail site to which the agreement relates for a purpose other than the retail sale of motor fuel; or (b) dispose of the retail site; or (c) operate the retail site for a purpose other than the retail sale of motor fuel. (7) If a retailer proposes to exercise an option to renew a fuel re‑selling agreement to which paragraph (5)(b) relates, the retailer must: (a) request that the supplier provide a disclosure document in relation to the agreement, as set out in Annexure 1 or 2 (whichever applies), setting out the terms and conditions to apply to a renewed fuel re‑selling agreement; and (b) do so at least 60 days, and not more than 120 days, before the expiration of the current term of the agreement. (8) The terms and conditions, excluding duration, of a renewed fuel re‑selling agreement to which paragraph (5)(b) relates may differ from the original or current terms and conditions of the agreement, but any change must be reasonable and be made in good faith. (9) If a request is made by a retailer under subclause (7), the supplier must provide the disclosure document: (a) within 14 days after the request is made; or (b) if the terms and conditions are unchanged from the current terms and conditions of the agreement—at least 14 days before the agreement is renewed. (10) Part 4 applies to a dispute arising from: (a) a failure by a supplier to renew a fuel re‑selling agreement; or (b) a failure by a supplier and retailer to agree on terms and conditions to apply to a renewed fuel re‑selling agreement. Circumstances in which a fuel re‑selling agreement may have a different duration (11) A supplier and a prospective retailer may agree on a different duration for a fuel re‑selling agreement if: (a) the retail site on which the fuel re‑selling business is carried on is leased under a lease that will expire: (i) within 5 years after the agreement commences (for an agreement mentioned in subclause (4)); or (ii) within 9 years after the agreement commences (for an agreement mentioned in subclause (5)); or (b) the supplier has decided that, within 5 years after the agreement commences (for an agreement mentioned in subclause (4)), or within 9 years after the agreement commences (for an agreement mentioned in subclause (5)) it will: (i) lease the retail site on which the fuel re‑selling business is to be carried on for a purpose other than the retail sale of motor fuel; or (ii) dispose of the retail site on which the fuel re‑selling business is to be carried on; or (iii) operate the retail site on which the fuel re‑selling business is to be carried on for a purpose other than the retail sale of motor fuel; or (c) the total initial non‑refundable amount that the prospective retailer must pay, or agree to pay, to the supplier and any associates of the supplier, before commencing operations under a new or renewed fuel re‑selling agreement, would be less than $20,000, excluding any of the following amounts: (i) payment for motor fuel at or below the usual wholesale price; (ii) payment of the usual wholesale price of motor fuel taken on consignment; (iii) payment at market value for the purchase or lease of real property, fixtures, equipment, services or supplies that are needed to operate under the fuel re‑selling agreement; (iv) security deposits for fuel stocks, real property, fixtures, equipment, services or supplies provided by the supplier.