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Supply of petroleum products
Following is a question by Dr the Hon Samuel Wong Ping-wai and a written reply by the Secretary for Economic Services, Mr Gordon Siu, in the Legislative Council today (Wednesday):
Question:
Will the Government inform this Council:
(a) of the number of companies presently operating as agents for the supply of petroleum products to petrol filling stations which in turn provide fuels, such as petrol and diesel, to motorists;
(b) whether the prices of petroleum products supplied by these companies are set at a uniform level; if so, whether these companies are offering services on the basis of fair competition; and
(c) how these companies can be prevented from monopolising the market, so as to safeguard the interests of consumers?
Reply:
(a) There are five companies supplying diesel fuel and petrol to 178 filling stations operated by 119 dealers.
(b) Currently, the prices charged by four of the companies supplying these products are identical. The prices charged by the fifth company are currently some 3 to 7% lower than those charged by the other companies. The similarity of prices is the result of the companies supplying nearly identical products and having similar cost structures and operating characteristics. The markets for diesel and petrol are price sensitive and each company is conscious of and responsive to the actions of its competitors. Though these factors militate against differential prices, they bring about competition for market share, expressed through advertising, creating product differentiation, and a variety of customer services.