ICCC News

The Independent Consumer and Competition Commission (“ICCC”) announces the new retail fuel prices for this month which will take effect on Sunday, 08th July, 2018.

According to the ICCC’s calculations, retail fuel prices (for petrol, diesel and kerosene) will all decrease throughout PNG as of 08th July, 2018. The decreases in retail fuel prices for this month are attributed to the decreases in their Import Parity Prices (IPP) for this month. The decreases in the IPP are mainly due to the decreases in crude oil prices in June, 2018.

The domestic retail fuel prices for petrol, diesel and kerosene are inclusive of the IPP, domestic sea and road freight rates for the third quarter of 2018, the 2018 wholesale and retail margins for petrol, diesel and kerosene; including excise duty for petrol and diesel, and the Goods and Services Tax (GST).

PORT MORESBY

As a result of adding all the various cost components mentioned above, the maximum retail prices for fuel in Port Moresby are as follows:

Port Moresby Retail Prices (toea per litre)

 

Petrol (tpl)

Diesel (tpl)

Kerosene (tpl)

Retail Prices as of 8th July, 2018

371.55

      341.48

       312.68

Retail Prices as of 8th June, 2018

378.25

345.09

317.48

Price Variance (+/-) toea per litre

-6.7

-3.61

-4.79

 

ALL CENTRES

For all centers, the maximum retail fuel price for each fuel product in the country will decrease on average as follows:

  • Petrol prices will decrease by 6.55 toea per litre;
  • Diesel prices will decrease by 3.18 toea per litre; and
  • Kerosene prices will decrease by 4.22 toea per litre.

Retail prices in all other designated centres will change according to their approved in-country shipping and road freight rates (for the third quarter of 2018) that are charged by the fuel distributors.

As part of the ICCC’s enforcement and compliance of fuel prices, its Investigation Officers will conduct inspections at all service stations to ensure prices of petroleum products do not exceed the allowable maximum prices. The following ICCC officers will conduct compliance inspections in Lae, Goroka, Kokopo and Port Moresby. Inspections in other provinces will be supported by our contacts in those provinces. Please note:

  • Mr. Christopher Gabesoa, Mr. Seri Tau Vali, Mr. Dennis Jerry and Mr. Bill Boiu will conduct compliance inspections to all service stations in the National Capital District. They can be reached on telephone number 325 2144;
  • Mr. Johnny Anderson, Ms. Pamela Ipambonj and Mr. Timothy Ponau will conduct compliance inspections in Lae. They can be reached on telephone number 472 2859;
  • Mr. Bobby Tei, Roman Rosting and Mrs. Dorcas Baining Julai will conduct compliance inspections in Kokopo, Rabaul, Kerevat, Warangoi and Toma. They can be reached on telephone number 982 9711; and
  • Mr. Kevin Kondo, Mr. Banmu Olivi and Mr. Jeffery Khar will conduct compliance inspections in Goroka, Kainantu, Kundiawa and Mt. Hagen. They can be reached on telephone number 532 1077.

The prices set by the ICCC are the indicative maximum retail prices, for which retailers may choose to sell below the maximum price. The ICCC would like to remind retailers who sell fuel using pumps to set fuel prices to one decimal place while the ICCC will continue to set the maximum price to 2 decimal places.

No fuel pump operator should charge above the Indicative Retail Price for this month’s price regardless of the number of decimals. This is to ensure compliance with the Prices Regulation Act under which the maximum prices of refined petroleum products are set. Retailers who are displaying prices to 1 decimal place are urged by the ICCC to round the prices down to ensure prices are within the allowable indicative retail prices. The ICCC Inspectors will continue to conduct spot checks after 08th July, 2018, to ensure on-going compliance by fuel operators.

Consumers are advised to report any instances of overcharging by retailers through the ICCC’s Consumer Protection Division on 325 2144, on toll free number: 180 3333 or by contacting our Regional Offices closest to you on the numbers provided above.

The announcement of the acquisition of Laga Industries Limited (Laga) a subsidiary of Steamships Limited by Paradise Company Limited (Paradise) a subsidiary of Nambawan Super Limited surprised the “Competition Watchdog”, the Independent Consumer and Competition Commission (ICCC).

The ICCC only became aware of the acquisition when it was reported in the daily newspapers on the 3rd of July 2018 and the ICCC is indeed disappointed that Nambawan Super Limited and Steamship Limited did not approach the ICCC.

The ICCC strongly condemns such corporate behaviour and will investigate the acquisition of Laga Industries Limited (“Laga”) by Paradise Company Limited (“Paradise”) to assess whether or not it would have any serious negative competition effects.

The ICCC Commissioner and Chief Executive Officer, Mr. Paulus Ain said, “Whilst the current pre-merger notification regime under the Independent Consumer and Competition Commission Act 2002 (ICCC Act”) is voluntary, the ICCC is concerned that Paradise and Laga did not make an attempt to consult nor seek either Clearance or Authorization before completing this acquisition.”

Section 69 of the ICCC Act prohibits any person from acquiring the assets of a business or shares if that acquisition would, or would be likely to have, the effect of substantially lessening competition in a market. Therefore, in order to safe guard individuals and companies from breaching Section 69, it is advisable that they consult or seek appropriate approval from the ICCC before completing an acquisition.

Commissioner Ain further stated, “I am very concerned about the current trend of businesses   discounting their corporate responsibility to take appropriate steps and liaise with the ICCC in advance of a potential merger, especially where there is some degree of competition between them.”

“I know Steamships Trading Company, as the previous owner of Laga, is well aware of the relevant provisions of the ICCC Act, especially where there are actual and potential overlaps between products produced by Laga and Paradise.”

“The fact that Steamships did not voluntarily notify the ICCC of its intention to sell Laga demonstrates their blatant disregard of the ICCC Act and the laws of PNG. The same could be said for Paradise.”

Commissioner Ain further said that it is because of the lack of transparency and ethic in the business community in PNG where a number of business mergers and acquisitions have been consummated without businesses notifying the ICCC in the first instance; the ICCC has recently proposed for Mandatory Notification of mergers and acquisition in PNG. The proposed mandatory notification amendments have gone through a wider public consultation process and is now before Parliament for approval. Once this is enacted into law, this will give the ICCC a greater regulatory control of business mergers and acquisitions that would be potentially anti-competitive. 

The ICCC will be investigating the recent acquisition of Laga by Paradise; and will not hesitate to challenge it if the ICCC deems that the acquisition is likely to breach of Section 69 of the ICCC Act.

The Independent Consumer and Competition Commission (ICCC) wishes to inform key stakeholders and the general public that the ICCC has granted Authorization to Air Niugini Limited (Air Niugini) to enter into and give effect to a code-share agreement with Fiji Airways Limited on the Port Moresby (PNG) to Nadi (Fiji) route via Honiara.

ICCC Commissioner and Chief Executive Officer, Mr. Paulus Ain said that on the 14th December, 2017, the ICCC received an application for Authorization from Air Niugini for it to enter into and give effect to a code-share agreement with Fiji Airways for a period of three years.

“The application was made pursuant to Section 70 of the Independent Consumer and Competition Commission Act 2002 (ICCC Act). This code-sharing arrangement is the first between Air Niugini and Fiji Airways since their existence. Air Niugini will be operating the services between Port Moresby and Nadi.” Commissioner Ain said.

In assessing this application, the ICCC conducted a wider public consultation. The ICCC also released its Draft Determination for public and stakeholders’ comments on its assessment of the application and its reasoning for its proposed decision. The views of industry participants as well as other interested stakeholders were taken into consideration in finalising this Determination.

Commissioner Ain said: “The ICCC has considered the principal market to be the market for the provision of air passenger services between Port Moresby and Fiji. It is also considered that the services from Australian ports to Fiji may have some competitive pressure on the principal market. For the purposes of assessing this application, the ICCC has considered the relevant market is the provision of regular air passenger services between PNG and Fiji, in particular, the Port Moresby and Nadi ports.”

Currently, only Air Niugini is servicing the Port Moresby/Nadi (POM/NAN) route (via Honiara). Therefore, the ICCC believes this code-share arrangement would provide an opportunity for another carrier in Fiji Airways to enter the market through partnering with Air Niugini; and eventually grow its market share on the route; and may enter into a more competitive form of code-share arrangement or enter the market as an independent carrier.

In its assessment of the public benefits this code-share is likely to generate, the ICCC has considered that the following would be achieved in the long run:  

  • Travellers’ choice of marketing carriers would be increased (from one to two as currently it is only Air Niugini);
  • The arrangement would develop the route and make Port Moresby as a transit hub for passengers from New Zealand, United States, Honiara, Fiji and other Pacific Island nations to Asia and vice versa. This would increase traffic volume through Port Moresby and make it possible for more frequent services therefore, reducing passenger flight times to Asian destinations. This outcome would also lead to cheaper fares in the long run as a result of increased passenger volumes;
  • The possibility of Fiji Airways (and other Pacific carriers) to enter PNG market independently after growing its market share on this route; and
  • Provision of direct and increased frequency services.

Besides other likely detriments that may result from this proposed code-share, the ICCC also noted that the ‘free sale’ code-share arrangement does not promote strong competition between the code-share partners.

Hence, to minimise any potential anti-competitive effects and other related detriments to the public, the ICCC has imposed certain conditions to the Authorization. Amongst others, the following are the key conditions;

  • Air Niugini must price and sell its code-share services independently of Fiji Airways;
  • Air Niugini must revise its wholesale prices offered to Fiji Airways down once profitability is reached through increased passenger and freight volumes;
  • If, during the period of the Authorization, either of the parties increases airfares excessively without any valid justification on the code-share services, the ICCC will review the Authorization, pursuant to Section 80 of the ICCC Act, as such events may undermine the likely public benefits that this Authorization is based upon. The ICCC will then consider whether the balance between public detriment and public benefit still favours net public benefit;
  • Air Niugini is to submit annual code-share passenger and freight traffic volume reports to the ICCC, for the POM/NAN route; and 

Commissioner Ain said: “Overall, the ICCC is satisfied that this code-share will result in more benefits to the public outweighing the potential detriments to competition in the market and other detriments. The ICCC therefore granted Authorization for a period of three years.

The Independent Consumer and Competition Commission (“ICCC”) announces the new retail fuel prices for this month which will take effect on Friday, 8th June, 2018.

According to the ICCC’s calculations, retail fuel prices for petrol, diesel and kerosene will all increase throughout PNG as of 8th June, 2018. The increase in retail fuel prices for this month are attributed to the increases in their Import Parity Prices (IPP) for this month. The increases in the IPP are mainly due to the increase in crude oil prices and the depreciation of the PNG kina against the US dollar in May, 2018.

The domestic retail fuel prices for petrol, diesel and kerosene are inclusive of the IPP, domestic sea and road freight rates for the second quarter of 2018, the 2018 wholesale and retail margins for petrol, diesel and kerosene; including excise duty for petrol and diesel, and the Goods and Services Tax (GST).

As a result of adding all the various cost components mentioned above, the maximum retail prices for fuel in Port Moresby are as follows:

 

Port Moresby Retail Prices (toea per litre)

 

Petrol (tpl)

Diesel (tpl)

Kerosene (tpl)

Retail Prices as of 8th June, 2018

378.25

      347.45

       317.48

Retail Prices as of 8th May, 2018

361.66

330.96

305.76

Price Variance (+/-) toea per litre

+13.59

+16.48

+11.72

 

For the month of June, the maximum retail fuel price for each fuel product in the country will increase on average as follows:

  • Petrol prices will increase by 26.64 toea per litre;
  • Diesel prices will increase by 30.77 toea per litre; and
  • Kerosene prices will increase by 26.43 toea per litre.

Retail prices in all other designated centres will change according to their approved in-country shipping and road freight rates (for the second quarter of 2018) that are charged by the fuel distributors.

As part of the ICCC’s enforcement and compliance of fuel prices, its Investigation Officers will conduct inspections at all service stations on Friday, 8th June, 2018, to ensure prices of petroleum products do not exceed the allowable maximum prices. The following ICCC officers will conduct compliance inspections in Lae, Goroka, Kokopo and Port Moresby. Inspections in other provinces will be supported by our contacts in those provinces. Please note:

  • Mr. Christopher Gabesoa, Mr. Seri Tau Vali, Mr. Dennis Jerry and Mr. Bill Boiu will conduct compliance inspections to all service stations in the National Capital District. They can be reached on telephone number 325 2144;
  • Mr. Johnny Anderson, Ms. Pamela Ipambonj and Mr. Timothy Ponau will conduct compliance inspections in Lae. They can be reached on telephone number 472 2859;
  • Mr. Bobby Tei, Roman Rosting and Mrs. Dorcas Baining Julai will conduct compliance inspections in Kokopo, Rabaul, Kerevat, Warangoi and Toma. They can be reached on telephone number 982 9711; and
  • Mr. Kevin Kondo, Mr. Banmu Olivi and Mr. Jeffery Khar will conduct compliance inspections in Goroka, Kainantu, Kundiawa and Mt. Hagen. They can be reached on telephone number 532 1077.

The prices set by the ICCC are the indicative maximum retail prices, for which retailers may choose to sell below the maximum price. The ICCC would like to remind retailers who sell fuel using pumps to set fuel prices to one decimal place while the ICCC will continue to set the maximum price to 2 decimal places.

No fuel pump operator should charge above the Indicative Retail Price for this month’s price regardless of the number of decimals. This is to ensure compliance with the Prices Regulation Act under which the maximum prices of refined petroleum products are set. Retailers who are displaying prices to 1 decimal place are urged by the ICCC to round the prices down to ensure prices are within the allowable indicative retail prices. The ICCC Inspectors will continue to conduct spot checks after 8th June, 2018, to ensure on-going compliance by fuel operators.

Consumers are advised to report any instances of overcharging by retailers through the ICCC’s Consumer Protection Division on 325 2144, on toll free number: 180 3333 or by contacting our Regional Offices closest to you on the numbers provided above.

The Independent Consumer and Competition Commission (ICCC) has recently become aware of the proposed merger between Majestic Food Corporation Limited and Frabelle (PNG) Limited through a report in The National newspaper dated 14th May, 2018.

As part of its competition role, the ICCC has informed the parties to this proposed transaction that Section 69 of the Independent Consumer and Competition Commission Act 2002 (ICCC Act) prohibits business mergers or acquisitions that would have, or would be likely to have, the effect of substantially lessening competition in a market in Papua New Guinea.

However, Section 81 of the ICCC Act allows for the parties to seek Clearance from the ICCC. Alternatively, Section 82 of the ICCC Act allows the ICCC to grant Authorisation to parties should the ICCC form a view that the proposed transaction would result in net public benefits despite its likely harm to competition.

A Clearance or Authorization from the ICCC safeguards the transaction from being challenged for potential breach of Section 69 of the ICCC Act by aggrieved third parties.

ICCC Commissioner and Chief Executive Officer, Paulus Ain said that although notifications for Clearance and Authorization are currently voluntary, the ICCC can investigate any business acquisitions in any market(s) in PNG should it form a view that the business transaction may have harmful implication(s) to competition.

“It is therefore, prudent that the parties seek either a Clearance or an Authorization from the ICCC, to protect this proposed transaction from future investigation and potential litigation action under the ICCC Act.” Mr. Ain said.

“In view of the above, the parties are requested, as responsible corporate citizens, to formally seek Clearance under Section 81 of the ICCC Act. If a valid Clearance application is submitted, the ICCC will review and give a decision within 20 days after the date of receiving and registering the application.”