ICCC News

The Independent Consumer and Competition Commission (“ICCC”) hereby announces the new retail fuel prices for this month, which will take effect on Monday, 08th April, 2019.                     

According to the ICCC’s calculations, retail prices for petrol, diesel and kerosene will all increase on average throughout PNG as of 08th April. The increase in the retail prices is mainly attributed to the increase in the crude oil prices and the depreciation of the PNG Kina against the US dollar both in March 2019, and the increase in domestic sea freight for the petroleum products in the second quarter of 2019. 

The domestic retail fuel prices for petrol, diesel and kerosene are inclusive of the Import Parity Prices (IPPs), domestic sea and road freight rates for the second quarter of 2019, the 2019 wholesale and retail margins for petrol, diesel and kerosene; including excise duty for petrol and diesel, and the Goods and Services Tax (GST).

PORT MORESBY

As a result of adding all the various cost components mentioned above, the maximum retail prices for fuel in Port Moresby are as follows:

Port Moresby Retail Prices (toea per litre)

 

Petrol (tpl)

Diesel (tpl)

Kerosene (tpl)

Retail Prices as of 8th April, 2019

356.94

331.83

301.95

Retail Prices as of 8th March, 2019

335.51

324.64

296.08

Price Variance (+/-) toea per litre

+21.43

+7.20

+5.87

 

Retail prices in all other designated centres will change according to their approved in-country shipping and road freight rates (for the second quarter of 2019) that are charged by the fuel wholesalers.

ALL CENTRES

For all centers, the maximum retail fuel prices for each petroleum product in the country will change on average as follows:

  • Petrol prices will increase by 22.55 toea per litre;
  • Diesel prices will increase by 8.28 toea per litre; and
  • Kerosene prices will increase by 7.05 toea per litre.

As part of the ICCC’s enforcement and compliance of fuel prices, its Investigation Officers will conduct inspections at all service stations to ensure prices of petroleum products do not exceed the allowable maximum prices. The following ICCC officers will conduct compliance inspections in Lae, Goroka, Kokopo and Port Moresby. Inspections in other provinces will be supported by our contacts in those provinces. Please note:

  • Mr. Christopher Gabesoa, Mr. Seri Tau Vali, Mr. Dennis Jerry and Mr. Bill Boiu will conduct compliance inspections to all service stations in the National Capital District. They can be reached on telephone number 325 2144;
  • Ms. Pamela Ipambonj and Mr. Timothy Ponau will conduct compliance inspections in Lae. They can be reached on telephone number 472 2859;
  • Mr. Bobby Tei, Roman Rosting and Mrs. Dorcas Baining Julai will conduct compliance inspections in Kokopo, Rabaul, Kerevat, Warangoi and Toma. They can be reached on telephone number 982 9711; and
  • Mr. Kevin Kondo and Mr. Jeffery Khar will conduct compliance inspections in Goroka, Kainantu, Kundiawa and Mt. Hagen. They can be reached on, following mobile numbers 7369 8251/ 7232 4861.

The prices set by the ICCC are the indicative maximum retail prices. Retailers may choose to sell below the ICCC approved maximum price. The ICCC would like to remind retailers who sell fuel-using pumps to set fuel prices to 1 decimal place while the ICCC will continue to set the maximum price to 2 decimal places.

No fuel pump operator should charge above the Indicative Retail Price for this month’s price regardless of the number of decimals. This is to ensure compliance with the Prices Regulation Act under which the maximum prices of refined petroleum products are set. Retailers who are displaying prices to 2 decimal place are urged by the ICCC to round the prices down to ensure prices are within the allowable indicative retail prices. The ICCC Inspectors will continue to conduct spot checks after 08th April, 2019, to ensure on-going compliance by fuel operators.

Consumers are advised to report any instances of overcharging by retailers through the ICCC’s Consumer Protection Division on telephone 325 2144, or via our toll free number: 180 3333 or by contacting our Regional Offices closest to you on the numbers provided above.

The Independent Consumer and Competition Commission (“ICCC”) has ceased an investigation into a Memorandum of Understanding (MoU) that was entered into by Air Niugini Cargo Limited (“ANCL”) and Hevilift Limited (“Hevilift”) after considering that the MoU does not have any anti-competitive clauses and that competition concerns are not likely to be established.

On 16th August last year, it was reported by the Post Courier that ANCL, a subsidiary of Air Niugini Limited (“ANL”), and Hevilift entered into a MoU for the usage of a Hevilift ATR-42 freighter aircraft by ANCL for freighter purposes. The ICCC then initiated inquiries into the arrangement.

ICCC Commissioner and Chief Executive Officer, Paulus Ain said the ICCC conducted an investigation and obtained information, including copies of the MoU from Hevilift and ANCL separately.

Commissioner Ain said the ICCC assessed the matter under Section 50 of the Independent Consumer and Competition Commission Act 2002 (“ICCC Act”) and concluded that;

  • The MoU does not have any anti-competitive clauses or provisions and therefore Section 50 of the ICCC Act was not infringed by the MoU;
  • The MoU is not a form of Joint Venture between ANCL and Hevilift, but a statement of partnership to make Hevilift’s ATR-42 Freighter available to ANCL should ANCL require it. It is more related to a marketing venture. There is a shared remuneration agreement for each flight booked by ANCL. Hevilift, however, can and does operate the ATR-42 Freighter solely for its own clients and benefits. ANCL can also elect not to use the Hevilift Aircraft should a better option be available.
  • That ANCL and Hevilift are not competitors. Hevilift is a dedicated freighter service provider for the transportation of personal and equipment in a variety of fields and has a diverse fleet of fixed and rotary wing aircraft backed by a highly experienced team.
  • ANCL withdrew its ATR72F freighter services effective on 11th December, 2015. Thus, ANCL operates its freighter services in the cargo hauls of the ANL commercial fleet.
  • Thus cargoes transported by Hevilift cannot be transported in ANL fleet cargo hauls, unless ANL decides to commission a dedicated freighter similar to that of Hevilift. ICCC considered that it would not be onerous but this would come at a huge cost to ANL.

“The ICCC has considered that the MoU does not have any anti-competitive clauses or provisions,” Commissioner Ain said.

Commissioner Ain, however, added that ANCL and Hevilift have been advised that the ICCC reserves its rights to conduct further investigation into the matter should any serious competition concerns arise in the future; that indicate that the arrangement warrants a clearance or authorization by the ICCC.

The Independent Consumer and Competition Commission (“ICCC”) is conducting another Petroleum Industry Pricing Review (Review) to determine appropriate wholesale, retail and drum-filling margins for declared petroleum products (petrol, diesel and kerosene) for the next regulatory period (2020-2024).

ICCC Commissioner and Chief Executive Officer, Paulus Ain said the current regulatory arrangements for these declared petroleum products will expire on 31st December, 2019.

“Being the administrator of the Prices Regulation Act (PR Act), the ICCC is responsible for setting the annual wholesale, retail and drum-filling margins, and the monthly retail prices for petrol, diesel and kerosene in the country.”

Commissioner Ain said some of the broader issues that will be considered as part of this Review will include, but are not limited to, the following:

  • Identify any competition issues in the (1) refining market, (2) the wholesale and distribution market (3) and the retail market for refined petroleum products over the last five years;
  • Review the current monitoring arrangements of the IPP, and domestic road and sea freight; and decide on an appropriate form(s) of regulation for the next regulatory period, should regulation continue;
  • Review the current cost build-up of fuel products (petrol, diesel and kerosene) from the Napa Napa refinery through the domestic distribution networks to the retail outlets and identify any inefficiencies that can be addressed as part of this study;
  • Review and assess the industry participants’ fixed asset registers to determine an appropriate Regulatory Asset Base to apply in the next price path period for distribution and retail assets;
  • Review the Weighted Average Cost of Capital used in the 2016 Final Report and recommend changes where necessary.
  • Review and assess budget and forecasted information provided by industry participants relating to sales and demand, revenues, operating and maintenance expenditures, and capital expenditures for the forthcoming regulatory period to ensure recovery of efficient costs, at a given level of service quality;
  • Based on the respective forecast revenue requirements, determine the appropriate Wholesale, Retail, and Drum filling margins for petrol, diesel and kerosense for the next regulatory period. 

A Public Notice advising of the Review was published in the newspapers and the Close of Receipt of Comments on that Public Notice is on April 30th.

A Draft Report will be releases on June 28th with the Close of Comments on this Draft Report on August 30th. ICCC will release a Final Report on the Review on 30th September.

Commissioner Ain said the ICCC endeavours to conduct this Review in an open and transparent manner before making its final determinations.

“The ICCC encourages the general public, interested stakeholders and fuel wholesalers and retailers to participate in this Review process by providing comments or written submissions on the issues outlined in this Public Notice which might be relevant for the ICCC to consider as part of this Review.”

All submissions received will be treated as public information unless certain information is designated as “confidential”.

Enquiries on this Review should be forwarded to ICCC’s Executive Manager for Prices & Productivity Division, Mr. Jack Timi or the Manager for Prices, Mr. Junior Hasu on the telephone number 325 2144 or on email This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it., respectively.

The Independent Consumer and Competition Commission (“ICCC”) is conducting another Public Motor Vehicle and Taxi Fare Review (Review) to to determine appropriate fares for all the approved routes throughout PNG for the next regulatory period (2020-2024).

ICCC Commissioner and Chief Executive Officer, Paulus Ain said the current regulatory arrangements for PMV and taxi services will end on 31st December this year and therefore the ICCC is required under Section 25A (6) of the Prices Regulation Act  (PR Act) to undertake another Review.

PMV and taxi services are declared services for the purpose of price control under Sections 10 and 21 of the Prices Regulation Act (PR Act).

“In accordance with the PR Act, the ICCC is responsible for setting the PMV and taxi fares for all approved and designated routes in the country, thus this is an important exercise” Commissioner Ain said.

Some of the broader issues that will be considered as part of this Review will include but are not limited to the following:

  • Identify any competition issues in the PMV & taxi industry. This will include the impact of the introduction of premium PMV services such Ginigoada Meri safe buses (women only service) on existing PMVs;
  • Determine the efficient costs for owning and operating PMVs and taxis in PNG. This includes taking into consideration the average cost of a typical motor vehicle used for PMV and taxi services based on the range of vehicles used, average depreciation costs, average passenger capacity (for PMVs only) and average operating costs;
  • Estimate an appropriate Weighted Average Costs of Capital to determine an appropriate return on investment for PMV and taxi owners;
  • Using a building block appraoch, determine appropriate revenue requirements for  PMVs and Taxis respectively in the next regulatory period;
  • Based on the revenue requirement for PMVs, determine the appropriate fares (per kilometre fare) which will be used to re-set the base fares for all the approved routes in the country;
  • Based on the revenue requirement for Taxis, determine the appropriate fare (per kilometre fare) and flag fall rate; and
  • Consider all other issues relevant for this review but not limited to the enforcment of PMV and taxi fares, and safety and service standards.

A Public Notice advising of the Review was published in the newspapers. The closing date for Receipt of Comments in that Public Notice is April 31st.

A Draft Report will be released on July 31st. Close of Comments on this Draft Report will be August 30th. ICCC will then release a Final Report on the Review on 31st September.

Commissioner Ain said the ICCC endeavours to conduct this Review in an open and transparent manner before making its final determinations.

“The ICCC encourages the general public, interested stakeholders and current and prospective PMV and taxi owners to participate in this Review process by providing comments or written submissions on the issues outlined in this Public Notice. The ICCC will consider all relevant information provided in this Review.”

All submissions received will be treated as public information unless certain information is designated as “confidential”.

Enquiries on this Review should be forwarded to ICCC’s Executive Manager for Prices & Productivity Division, Mr. Jack Timi or the Manager for Prices, Mr. Junior Hasu on the telephone number 325 2144 or on email This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it., respectively.

The Independent Consumer and Competition Commission (“ICCC”) has granted clearance to Kina Bank Limited (Kina Bank) to proceed with the proposed acquisition of the Retail, Commercial and Small and Medium Enterprise (SME) businesses of Australia and New Zealand Banking Limited (“ANZ PNG”).

ICCC Commissioner and Chief Executive Officer, Paulus Ain said that the ICCC assessed Kina Bank’s authorization application and was satisfied that the Proposed Acquisition, if it proceeds, would not lessen competition in any of the relevant markets and therefore granted clearance for the acquisition to proceed.

In its consideration of the likely effects on competition as a result of the Proposed Acquisition the ICCC had formed the following conclusions:

  • Whilst ANZ PNG proposes to continue to carry on business in the corporate/institutional markets, its business in the consumer/SME/retail markets is proposed to be merged with that of the acquirer, hence, the number of competitors in the latter category of markets will be reduced because of the combination of the businesses of the proposed parties and, thereby, concentration in relevant markets would be increased.
  • However, the Proposed Acquisition is not likely to either significantly increase, or create any new, barriers to entry or expansion in the market because Kina Bank is a small player and ANZ PNG is a relatively small player compared to the main incumbent, Bank South Pacific (BSP). Furthermore, while the incumbents have existing branch and ATM networks which are non-trivial barriers to new entrants, the proposed combination assists the proposed acquirer to expand and compete more effectively in a market characterized by a dominant presence of BSP.
  • The Proposed Acquisition, if it proceeds, is not likely to give Kina Bank such power to significantly and sustainably increase its prices and profit margins because there are other effective competitors who will put competitive pressure on its products and services. It is noted that Kina Bank proposes to reduce its prices to maintain and capture some market shares, although that remains to be demonstrated;
  • The Proposed Acquisition would not impact the extent to which substitutes are available in the market;
  • The Proposed Acquisition does not remove a vigorous and effective competitor because ANZ PNG does not appear to have significantly expanded its business over recent past years. Besides, ANZ PNG has been more focused on its business interest in other areas and its business in the retail and SME markets have remained stagnant;
  • The existing levels of vertical integration will not be impacted by the Proposed Acquisition; and
  • The market is highly dynamic.

Commissioner Ain added that the Proposed Acquisition would generally involve ANZ PNG transferring to Kina Bank the retail customer deposits and loans including credit cards, commercial/SME customer loans and deposits (subject to minimum credit rating requirements), business premises including 15 retail branches and a portion of ANZ’s commercial office spaces in Port Moresby and Lae, ATMs and EFTPOS terminals, other fixed assets, some motor vehicles, and cash in hand, in respect of the relevant business and certain employees.

The Proposed Acquisition, however, did not include the sale of ANZ PNG’s corporate and institutional business in PNG.

“In complying with the mergers and acquisition provisions of the ICCC Act, Kina Bank submitted that the Proposed Acquisition should be allowed to proceed because it will not lessen competition in any of the relevant markets but instead will result in more benefits to the public,” Commissioner Ain said.

“Both Kina Bank and ANZ PNG offer retail, commercial and SME banking services in PNG, however, Kina Bank does not offer credit cards and operate a propriety Point of Sale Network.”

“In addition, Kina Bank only has branches in Lae and Port Moresby whilst ANZ has branches in Hides, Mt Hagen, Goroka, Madang, Kokopo, Kimbe and including Port Moresby and Lae.”

Commissioner Ain explained that, though Kina Bank applied for authorization under Section 82 of the ICCC Act, based on the conclusion that the Proposed Acquisition would not substantially lessen competition in any of the relevant markets identified, the ICCC was satisfied and has proceeded to give clearance, consistent with Section 82 of the ICCC Act.

The ICCC took into consideration comments from the applicant and other stakeholders, and considered that the Proposed Acquisition would affect the following markets:

  • The provision of transaction account services in specific main centres around PNG;
  • The provision of savings or term deposit accounts and investment services nationally;
  • The provision of home loan services nationally;
  • The provision of personal loan services nationally; and
  • The provision of SME banking services in specific main centres around PNG.