Petrol Companies are Price Matching, Not Price Fixing

[Ahsiong]

Below are 2 articles from today straits times forum section.

Looks like nobody can do anything to these petrol companies.

We are still going to be under their mercy to boost their incredible profits.

 

Price matching OK if there's no collusion

I REFER to last Friday's letter by Mr Tan Yu Wei, 'Why oil companies are seen as an oligopoly'.

The Competition Commission of Singapore (CCS) will not hesitate to investigate if there are reasonable grounds to suspect that market players are colluding to fix prices. Action will be taken against parties found to have infringed the Competition Act.

 

Regardless of whether the petrol companies have the same cost structure, it is not an infringement of the Competition Act for companies to match their competitors' prices, as long as these pricing decisions are made independently and not mutually agreed upon.

 

Anyone with information on collusive activities is encouraged to contact CCS at our hotline: 1800-325-8282 or e-mail us at [email protected] .

 

Chin Yen Yen (Ms)

Deputy Director, Corporate Communications

Competition Commission of Singapore

 

 

 

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'While consumers are struggling, oil companies are accumulating profits.'

 

MS JEANNIE FOO: 'I read with alarm and amazement on Friday ('Shell profits surge 33% on record oil prices) at the news on Shell's profits, while ExxonMobil has broken its own quarterly profit record. Since January, and except in the past few weeks, petrol pump prices have gone up and up. So while consumers struggle to bear high petrol prices and high inflation, oil companies are accumulating profits. Consumers were made to believe the petrol price increase was necessary to cover overhead costs and expenses caused by the increase in crude oil prices. But now I can only conclude the crude oil price increase was just an excuse for oil companies to push up prices further to increase their own profits. Is there no law to regulate whether it is justifiable for oil companies to increase their prices? If not, we are pretty much left at their mercy.'

 

[Testa_ross4]

So how do you fix prices without price matching?

[Speddevil]

By own stats or analysis

[Mzrmazda3]

Edited August 5, 2008 by Mzrmazda3

[Lv3338]

our sing CASE and CCS of mentioned....is wasting time...

a watchdog....or a dog been watched ?

Edited August 5, 2008 by Lv3338

[Dicksonzhang]

life is going on

Edited August 5, 2008 by Dicksonzhang

[Gt81]

i had a brush with CCS before as had previously asked them some anti-competition acts. From what i understand, CCS has to see the price-fixing very clear-cut before they will act. If you think again, who on earth will do price fixing in the open? I do not think the management of the various companies to be so stupid to announce to the world that they are fixing prices. I dun know whether i am offending anyone but just my views that CCS should do more and not just sit and wait for the world to tell them that they are engaging in anti-competitive acts.

[Galantspeedz]

Below are 2 articles from today straits times forum section.

Looks like nobody can do anything to these petrol companies.

We are still going to be under their mercy to boost their incredible profits.

 

Price matching OK if there's no collusion

I REFER to last Friday's letter by Mr Tan Yu Wei, 'Why oil companies are seen as an oligopoly'.

The Competition Commission of Singapore (CCS) will not hesitate to investigate if there are reasonable grounds to suspect that market players are colluding to fix prices. Action will be taken against parties found to have infringed the Competition Act.

 

Regardless of whether the petrol companies have the same cost structure, it is not an infringement of the Competition Act for companies to match their competitors' prices, as long as these pricing decisions are made independently and not mutually agreed upon.

 

Anyone with information on collusive activities is encouraged to contact CCS at our hotline: 1800-325-8282 or e-mail us at [email protected] .

 

Chin Yen Yen (Ms)

Deputy Director, Corporate Communications

Competition Commission of Singapore

 

 

 

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

~~~

'While consumers are struggling, oil companies are accumulating profits.'

 

MS JEANNIE FOO: 'I read with alarm and amazement on Friday ('Shell profits surge 33% on record oil prices) at the news on Shell's profits, while ExxonMobil has broken its own quarterly profit record. Since January, and except in the past few weeks, petrol pump prices have gone up and up. So while consumers struggle to bear high petrol prices and high inflation, oil companies are accumulating profits. Consumers were made to believe the petrol price increase was necessary to cover overhead costs and expenses caused by the increase in crude oil prices. But now I can only conclude the crude oil price increase was just an excuse for oil companies to push up prices further to increase their own profits. Is there no law to regulate whether it is justifiable for oil companies to increase their prices? If not, we are pretty much left at their mercy.'

 

 

Thank you for your e-mail dated 16 April 2008.

 

2 . The Competition Commission ofSingapore (CCS) is responsible for administering the Competition Actwhich has 3 main prohibitions:(a) the section 34 prohibition against anti-competitive agreementsbetween undertakings;(b) the section 47 prohibition against abuses of a dominant position;and© the section 54 prohibitionagainst mergers which substantially lessen competition in a market inSingapore.

 

3. CCS may commence investigationswhere there are reasonable grounds to suspect an infringement of theprohibitions under the Competition Act (Cap 50B).

 

4. In this regard, an observation of parallel pricing among petrolretail firms alone will not, in and of itself, amount to evidence ofcollusion. In an oligopolistic market, it is considered normal marketbehaviour for a firm to observe its competitors' conduct closely andfactor that into its own pricing strategy, so long as firms decide ontheir prices independently.

 

5. Thank you for the information provided in your feedback. Should youcome across further evidence or information in relation to the matterabove, please contact us again.

 

Thank you for your email.

 

2. CCS does not function as a price regulator. CCS promotes healthycompetitive markets where prices are subject to market demand and supplyforces. In some situations, companies may maintain different prices fromtheir competitors as part of their business strategy while in otherinstances, prices may converge to a similar level after a while.

 

3. With regard to the petrol retail market, price parallelism alone doesnot provide evidence of price collusion. It may also be the outcome ofnormal competitive behaviour in a market with a few players and almosthomogeneous product.

 

4. Of course, if there are reasonable grounds to suspect that there areagreements in whatever form between the market players to control price or output, then CCS would act against such practices.

 

 

I got the same reply too.

[Mzrmazda3]

Yeah Bro ...

[Slowmo]

will not hesitate to investigate means they are just passive body, people complain with black and white proof den will budge.

 

 

 

 

 

 

[Altivo]

the reply is as good as NOT a reply

[Kingcopa]

That is the SOP for all Government agency ans. LPPL

[Altivo]

yeah... scripted answer. Pui!

[Ahsiong]

Now CCS has come up with a templated answer, then the petrol companies don't even need to answer already. there was 2 articles last week asking the petrol companies to explain why their prices are always the same. Now CCS reply for them liao...save the trouble for them....sigh...

[Dec7f]

so now petrol price's abt $120, how come cartel still yet to price match with current oil price??

[Altivo]

all are in cahoots one. Ta ma de!

[Slowmo]

the TS for the letter should reply "I asking petrol company, not asking you, why you kpo? "

[Osiris]

what kind of power does CCS have to investigate a company? We are talking about oil companies not ah seng pte ltd. Oil companies leh.

 

What kind of evidence they need in order to have the authority to investigate?

Can they find evidence if they never had the authority to monitor a company?

 

If not, CCS is totally useless vs large co. It's like the police saying they will catch & prosecute anyone who never flush the toilet. When was the last time someone got caught for not flushing toilet?

 

I personally think CCS do not have the capacity/audacity to investigate any large companies with something such as these.

 

They already dismiss it as price matching on behalf of the cartels. They are doing PR job for them already. what do you think?

Do you think they will anger co that pour in billions and create jobs in S'pore?