 |
||
|
Published on Taipei Times http://www.taipeitimes.com/News/front/archives/2006/02/15/2003293067 Gas prices hike raises suspicion of price fixing By Jackie LinSTAFF REPORTER Wednesday, Feb 15, 2006, Page 1
State-run Chinese Petroleum Corp (CPC) decided to hike prices from noon yesterday while privately-owned Formosa Petrochemical Corp followed suit with new prices as of 5pm yesterday. Their almost simultaneous move means that the retail gas prices of the two competitors continue to match each other. This is the fifth time the two have made price adjustments on the same day since they were fined NT$6.5 million (US$200,000) each for price-fixing by the Fair Trade Commission in October 2004. The two refiners caught the attention of the fair trade watchdog again on Oct. 24 last year with synchronized price reductions of gasoline and diesel. The commission then re-launched investigations into their pricing strategies. "We've kept a close eye on fuel price fluctuations, but whether the two latest hikes by the companies mean they are guilty of colluding on prices requires more observation and investigation," said Yu Chao-chuan (§E´ÂÅv), the commission's vice chairman, during a phone interview. He said there is currently a lack of evidence that CPC and Formosa Petrochemical have cooperated to monopolize the market. The non-profit Consumers' Foundation yesterday denounced CPC's opaque pricing decisions, questioning whether skyrocketing crude oil prices were the only reason behind its price hike. "Are crude oil price hikes definitely directly related to the company's losses? We believe that operational costs and inefficient performance are the real reasons," the Foundation said in a press release. CPC said it has to bear a heavy burden when purchasing crude oil, and the latest price hikes would slash its revenue losses by NT$1.3 billion this month from a projected loss of NT$6 billion. It recorded a loss of NT$3.2 billion last month, according to a report by the Chinese-language Liberty Times, the sister newspaper of the Taipei Times.
Faced with a growing public backlash, Minister of Economic Affairs Morgan Hwang ( He has demanded that the state-run oil refiner submit reports on how to boost operational efficiency and reduce costs to help stabilize fuel prices. Meanwhile, the Cabinet on Monday night authorized CPC to decide fuel prices and when to adjust prices itself, without the need for direct approval from the Cabinet. But it demanded the company disclose financial statements, including oil purchase costs, and said that it must not collude with smaller rival Formosa Petrochemical on future price hikes. The price hikes are expected to further push up already high consumer prices and trigger inflation. The government's statistics showed that the consumer price index (CPI) rose by 2.65 percent last month year-on-year, reaching a new three-month high.
New gas prices:
|
