ICCC News

The Independent Consumer and Competition Commission (“ICCC”) is concerned about the large number of people in the rural and remote parts of Papua New Guinea who have yet to register their Subscriber Identity Module (SIM) cards.

ICCC Commissioner and CEO, Paulus Ain is concerned that the mobile network companies Digicel PNG Limited (Digicel PNG), Telikom Limited (Telikom) and BEmobile limited (Bemobile) are yet to register a substantial number SIM cards users).

ICCC has already had initial meetings with Digicel PNG and the National Information & Communications Technology Authority (NICTA) for an update on the status of the SIM card registration deadline which was initially scheduled for April 30th.

Commissioner Ain said: “I am concerned about the large number of consumers particularly in the rural and remote parts of PNG who will have their SIM cards deactivated. If their SIM cards get deactivated, how will they be able to have access to telecommunication services, electronic banking services, health service, including other essential services”. 

Since July of 2016, NICTA, with support from the Government, has been carrying out awareness to mobile service providers and consumers about the mandatory SIM card registration in the country. The ICCC has been monitoring the progress of this exercise and its concern is for the consumers not only in the major centers throughout the country but those that particularly live in rural and remote areas will be adversely affected because they, through no fault of their own, may have not been able to register their SIM cards to date.

Therefore, the ICCC is urging consumers to contact their mobile service providers to find out how they can register their SIM cards and urges NICTA, Telikom, Bmobile and Digicel to work together to decrease the number of unregistered SIM card especially in the rural areas and if possible further extend on the mandatory SIM card registration exercise by 3-6 months.

The Independent Consumer and Competition Commission (“ICCC”) announces the new retail fuel prices for this month which will take effect on Sunday, 8th April, 2018.

According to the ICCC’s calculations, retail fuel prices for petrol, diesel and kerosene will increase throughout PNG as of 8th April, 2018. The price increases for petrol and diesel are attributed to the increases in their respective Import Parity Prices (IPP) whilst the IPP for kerosene decreases for this month. The fluctuation in the IPP are attributed to the fluctuation in the Mean of Platts Singapore (“MOPS”) prices for petrol, diesel and kerosene which is linked to the crude oil prices during the month of March, 2018.

The domestic retail fuel price for petrol, diesel and kerosene is inclusive of the IPP, domestic sea and road freight rates for the second quarter of 2018, the 2018 wholesale and retail margins for petrol, diesel and kerosene; including excise duty for petrol and diesel, and the Goods and Services Tax (GST).

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, 2018

351.61

 

316.68

 

291.05

 

Retail Prices as of 8th March, 2018

347.67

312.13

289.60

Price Variance (+/-) toea per litre

+3.94

+4.55

+1.45

 

For the month of April, the maximum retail fuel price for each fuel product in the country will increase on average as follows:

 

  • Petrol prices will increase by 3.49 toea per litre;
  • Diesel prices will increase by 3.85 toea per litre; and
  • Kerosene prices will increase by 0.51 toea per litre.

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 2018) that are charged by the fuel distributors.

As part of the ICCC’s enforcement and compliance of fuel prices, its Investigation Officers will conduct inspections at all service stations on Monday, 9th April, 2018, 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 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;
  • Mr. Johnny Anderson, 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, Mr. Banmu Olivi and Mr. Jeffery Khar will conduct compliance inspections in Goroka, Kainantu, Kundiawa and Mt. Hagen. They can be reached on telephone number 532 1077.

The prices set by the ICCC are the indicative maximum retail prices, for which retailers may choose to sell below the maximum price. Again, the ICCC would like to remind retailers who sell fuel using pumps to set fuel prices to one 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 1 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 8thApril, 2018 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 325 2144, on 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”) advises that it has been in dialogue with Kumul Consolidated Holdings Limited (“KCHL”) on the proposed merger of Water PNG Limited (“Water PNG) and Eda Ranu Limited (“Eda Ranu”). KCHL is the trustee owner of all State Owned Entities, including Water PNG and Eda Ranu.

The ICCC Commissioner and Chief Executive Officer Mr. Paulus Ain said, “Section 69 of the Independent Consumer and Competition Act 2002 (“ICCC Act”) prohibits the acquisition of shares or assets of a business, if the acquisition would have, or would be likely to have the effect of substantially lessening competition in a market”.

“Given that the merger involves two of the largest water and sewage service providers in PNG, this may still raise competition concerns for potential competitors from providing similar services in the future. Therefore, a competition assessment is vital to ensure that the markets for the provision of water and sewage services are made accessible for potential service providers in the future.” Mr. Ain said.

Mr. Ain further explained that Sections 81 and 82 of the ICCC Act allows for the merging parties to seek Clearance or Authorization from the ICCC. An approval granted by the ICCC protects them from any future legal action that is brought under the ICCC Act on competition grounds.

Hence, the ICCC is working with KCHL to follow due process and submit its applications for ICCC’s assessment for clearance and/or authorization on the proposed merger.

The Independent Consumer and Competition Commission (ICCC) is aware of a product recall for all vehicles with defective Takata airbags by Australian Government, following an Australian Consumer and Competition Commission (ACCC) safety investigation.

The recall was issued, based on extensive evidence provided by the ACCC, that vehicles with defective Takata airbags may cause injury to drivers and/or passengers, and one or more suppliers of vehicles with defective Takata airbags have not taken satisfactory action to prevent those vehicles causing injury to drivers and/or passengers.

Globally, ruptures of defective Takata airbags have been associated with at least 23 deaths and 230 injuries.

ICCC Commissioner and Chief Executive Officer, Paulus Ain said that the ICCC undertook enquiries with various car dealers in Papua New Guinea to identify car dealers selling motor vehicles with Affected Takata Airbag Inflators, to establish whether car dealers and suppliers of the motor vehicles are aware of the compulsory recall, and to enquire on the steps taken by them to manage the recall and concerns of consumers that may be affected throughout the country.

The ICCC noted that:

  1. Concerned Motor Vehicle Manufacturer/s including Takata Corporation have  formally advised its Distributors/Motor Dealers/Suppliers of its decision to voluntarily replace all defective Takata airbags in the listed motor vehicles of various makes and models sold to its consumers;
  2. Management of affected Motor Car Dealers/Distributors have since set up processes and Management systems to help identify their affected clients and proceed with replacing the defective Takata airbag inflator;
  3. Motor Car Dealerships concerned have set timelines to follow from the time of initial notification of recalls from their suppliers to actual repair work carried out and feedback; and
  4. The Product Safety recall program for “Safety Airbag Inflator” replacement will be at no charge to the consumer/customer. 

Commissioner Ain said ICCC understands that affected customers/clients who have purchased motor vehicles with faulty/ detective Takata airbags are required to contact their Motor Dealership/Distributor/Supplier or go in person without delay to book a date to have the service done.

“Customers are also required to provide the Vehicle Identification Number and registration number of their vehicle for verification.” Commissioner Ain said.

“Affected customers and clients who have purchase motor vehicles through third parties are required to contact their dealer. If you have not being contacted by your car dealership, distributor, or supplier, you can contact the ICCC for further information.” 

Commissioner Ain said that the ICCC will continue to monitor and will consider taking appropriate action based on adverse findings and or information provided by its contacts in the provinces. 

Impact of the increase in Fuel taxes in Papua New Guinea

The Independent Consumer and Competition Commission (‘ICCC’) has come out to clarify its regulatory oversight over fuel prices in the country, given the new tax for fuel recently introduced in the 2018 National Budget. 

ICCC Commissioner and CEO Paulus Ain said: “Currently, the ICCC is only mandated to monitor the prices for Petrol, Diesel, Kerosene and Jet Fuel [petroleum products]. These petroleum products have been declared by the Minister for Treasury as “declared services” for the purpose of the Price Regulation Act.”

Under the Napa Napa Project Agreement between the Government and InterOil (now Puma Energy), it is a requirement that Import Parity Pricing (‘IPP’) must be used for setting retail prices for petroleum products in PNG. As per the Project Agreement, the IPP is the pricing formula that sets the benchmark prices for all refined petroleum products produced at the Napa Napa Refinery as if those products were imported from Singapore. 

“Singapore’s refined product prices are the benchmark prices observed by all countries in the AsiaPacific Region, including PNG. The ICCC is not a party to the Project Agreement, hence; it has no say over the pricing arrangements for refined fuel products from Napa Napa. However, the ICCC only monitors and verifies the IPP to ensure that it is in compliance with the Project Agreement.”

Mr. Ain added that in light of the fuel tax changes by the Government, the IPP will not be affected but the overall retail price or the IRP will increase. 

“The Government has approved for an increase in the excise duty for diesel from 10 toea per litre to 23 toea per litre, which will come into effective from 1st January, 2018. Due to the increase in excise, Government taxes [excise duty and GST] on diesel will account for 17.8% of the final retail price for diesel in 2018, which is an increase from 13.1% in 2017.” 

According to ICCC’s calculation, the increase in excise duty for diesel alone from 10 to 23 toea per litre will increase the final retail prices for diesel by approximately 5.75% in 2018.

Mr. Ain said the new import duties of 10 toea per litre for both diesel and petrol will not be reflected in the final retail prices because they are not part of the IPP formula, which was agreed upon between InterOil (now Puma Energy) and the Government in the Project Agreement. 

“Fuel importers will have to absorb the import duties in their margins. Therefore to avoid paying the import duty, fuel importers are encouraged to source fuel from Puma’s Napa Napa Fuel Refinery.”

The increase in the excise duty will likely have a cumulative effect on general inflation in 2018. Prices of goods and services will likely increase in 2018 as transport costs, amongst other costs, of providing these goods and services are likely to increase due to increase in fuel costs. 

Mr. Ain said that as a responsible regulator, the Commission is urging all Papua New Guineas to prepare for these new changes by the Government, and cut back on wasteful spending.  

“The ICCC has no control over the introduction of new fuel taxes. This is the prerogative of the Government of PNG.”