Tue, Jun 11, 2013 - Page 3 News List

Lawmaker calls for FTC report on refiners’ prices

By Chris Wang  /  Staff reporter

Democratic Progressive Party Legislator Gao Jyh-peng talks at a press conference in Taipei yesterday highlighting his call for a probe into the nation’s oil refiners.

Photo: CNA

Democratic Progressive Party (DPP) Legislator Gao Jyh-peng (高志鵬) yesterday said that he would request the Fair Trade Commission (FTC) investigate potential anti-competitive activity by CPC Corp, Taiwan, and Formosa Petrochemical Corp (FPC) within a month of the start of the upcoming extra legislative session.

Gao told a press conference that he was pleased that the FTC plans to launch another investigation into CPC and FPC, the nation’s only oil refiners, over a potential monopoly.

However, the lawmaker said that the FTC should consider the practice as being a monopoly rather than collusion or a cartel, a view he had given in a previous news conference in March, because it would take more substantial evidence to prove that the two companies have actively colluded on fixing fuel prices.

Insufficient evidence of such activity would result in a rejection of a fine by the Administrative Court or the Ministry of Economic Affairs’ Petitions and Appeals Committee, Gao said.

With different corporate structures, crude oil resources, refinery processes, production output and costs, the two companies could not have possibly have sold their products at the same prices, the lawmaker said.

“Any citizen would realize how ridiculous the pricing mechanism is, but the FTC has been sitting on the issue for years,” he said.

The lawmaker said Formosa Petrochemical could have offered lower fuel prices than CPC as it is a younger company with fewer personnel and better refinery equipment.

FPC has been making disproportionate profits because of the alleged anti-competitive behavior, Gao said, adding that it posted profits of NT$44.4 billion (US$1.49 billion) in 2010 and NT$24.7 billion in 2011, while CPC generated profits of NT$24.1 billion in 2010 and reported a loss of NT$38.7 billion in 2011.

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