Ballina Petroleum fined for selling tainted fuel

Fines totalling $470,000 have been imposed after Dojoo Pty Ltd, formerly trading as Ballina Petroleum Distributors, and its managing director, Mr Santo Pennisi, pleaded guilty and were convicted of falsely representing the quality and composition of fuel sold in northern New South Wales.

The fines were ordered by Justice Logan of the Federal Court, Brisbane, in criminal proceedings brought by the Commonwealth Director of Public Prosecutions. The prosecution arose out of an investigation by the Australian Competition and Consumer Commission following the airing of a story by Channel 7's Today Tonight program in June 2007.

Until September 2007 Dojoo was an independent distributor and reseller of BP branded fuel. In northern New South Wales, Dojoo and related entities owned and operated 12 BP branded service stations, either directly or through third party licensees.*

The ACCC alleged that between 14 September 2004 and 22 June 2007, Dojoo caused almost two million litres of regular unleaded petrol to be delivered to its service stations and placed in the tanks containing BP Premium, BP Ultimate and, prior to April 2005, BP Lead Replacement petrol. The ACCC alleged that the petrol sold often had a lower octane rating than represented.

The defendants admitted to adulterating the fuel to maintain a competitive edge in the marketplace.

Justice Logan observed that the defendants were motivated by greed and their conduct in responding to increased competition had the "aggravating element of dishonesty about it."

He also noted "consumer were in a position of vulnerability in the sense that there were no particular means by which they could identify they indeed received the type of fuel they were buying."
 
Dojoo and Mr Pennisi were ordered to pay fines of $400,000 and $70,000 respectively.

In imposing these fines, Justice Logan took into account that Dojoo and Mr Pennisi fully cooperated with the ACCC's investigation, entered pleas of guilty to all 28 charges at the earliest opportunity and made reparation to the local community.

Dojoo made a charitable donation of $200,000 to Southern Cross LADS Inc and compensated BP Australia and identifiable BP account customers.

"These were deliberate offences involving a serious breach of trust in relation to consumers," ACCC Chairman, Mr Graeme Samuel, said.

"The fines ordered reflect the court's strong disapproval of such conduct.

"Petrol prices are of great concern to many Australians. Consumers paying premium prices for higher quality petrol should be confident that product descriptions on petrol pumps are an accurate reflection of the petrol they receive."

Dojoo was also ordered to pay the ACCC's court costs.

Background

*The ACCC did not allege that BP Australia or any of the third party licensees were involved in the conduct. The service stations are now supplied by Reliance Petroleum, a subsidiary of BP Australia Pty Ltd.