Price-fixing suspected in gas market

Press, 8 October 1987, Page 15

Price-fixing suspected in gas market

PA Auckland Commerce Commission investigators seeking evidence of collective pricefixing in the Auckland alternative fuels market warn that offending service stations face maximum fines of $300,000. The commission has focused its sights on compressed natural gas and liquefied petroleum gas pricing throughout Auckland, after a complaint by the Papakura City Council. Although six of seven tenders for 'C.N.G. supply to the council were ex-

actly the same — at 87c a kilogram — the commission was unable in that particular instance to find proof of collective pritefixing, the “New Zealand Herald”. reported.

But as a result of information from the council, it has decided to extend its Inquiry to the methods of calculating both C.N.G., and L.P.G. prices throughout greater Auckland.

A commission spokesman, Mr Wayne Boyd, said in a letter to the council that it was not enough to assume there had been a breach of the Commerce Act merely because the retailers had ail tendered the same price. It was necessary -to identify an arrangement between retailers which had the purpose or effect of substantially lessening competition in the market

This meant there had to be substantial evidence to show there yvas someform of communication between the retailers aimed at their taking a common course of action. Mr Boyd warned that any traders who were collectively setting .their, prices by prior arrangement should know they were running a big risk, with courts empowered to fine offending companies up to $300,000, ’ The president of the C.N.G. federation, Mr George McLean, said it came as no surprise to him that so many Papakura service stations should offer the same price.They all paid the same price for wholesale supplies — which, unlike retail sales. are still under price control — and Wjgid have similar over/;