Chinese Petroleum Corp (中油) and Formosa Petrochemical Corp (台塑石化), the nation's two oil refiners, are facing government fines for following each other in price moves, the Fair Trade Commission said.
A panel decided in a meeting today to impose a fine of NT$6.5 million (US$191,910) on each of the companies for price collusion, the commission said.
After long investigations into the marketing practices of the two companies, the commission determined that the two companies have adjusted oil prices in collusion in recent years, violating fair trade laws and consumers' rights, Fair Trade Commission Vice Chairman Chen Chi-yuan (陳紀元) said.
The commission had received numerous complaints from customers about possible collusion between the two companies, who had raised or lowered prices in sync 20 times since 2002, he said.
While the two companies had not held meetings or signed any agreements regarding the collusion practices, solid evidence was found that the two have worked in concert to manipulate domestic oil prices under a tacit understanding, he added.
The Chinese Petroleum controls about 70 percent of Taiwan's oil product market, and Formosa Petroleum the rest, a condition the commission called "not enough competition."
Chinese Petroleum will appeal to the Cabinet, a procedure that may take a few years, a company spokesman said.
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