XN000022-1990-02-28 — Page 14

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WEDNESDAY, FEBRUARY 28, 1990

12

IN CASES IN

"THE WAY IN WHICH THIS REGULATION IS EXERCISED, WHICH IT IS APPLIED, DEPENDS ON THE SIZE OF THE COMPANY, ITS POSITION IN THE MARKET, AND THE NATURE OF ITS OPERATIONS.

"THE REGULATION MAY BE BY WAY OF LEGISLATION, FRANCHISE A SCHEME OF CONTROL AGREEMENT. BUT IN ALL SUCH CASES THE OF REGULATION IS KEPT ΤΟ THE MINIMUM COMPATIBLE WITH INTEREST," SHE SAID.

AND/OR LEVEL

PUBLIC

MRS CHAN POINTED OUT THAT THE ULTIMATE CONTROL LAY IN THE REQUIREMENT FOR THE CHARGES LEVIED TO BE SUBJECT TO THE GOVERNMENT'S APPROVAL.

IN APPROVING SUCH CHARGES, THE BASIC CONSIDERATIONS WERE THAT THE COMPANY SHOULD HAVE MADE EVERY EFFORT TO ACHIEVE COST ECONOMIES SHOULD BE FOR THE BENEFIT OF CONSUMERS, AND THAT HAVING DONE SO, IT ALLOWED TO

RECOVER THE FULL COST OF PROVIDING THE SERVICE TOGETHER WITH A REASONABLE PROFIT SO AS TO ENCOURAGE FURTHER INVESTMENT TO MEET CHANGES IN DEMAND AND APPROVED STANDARDS IN SERVICE.

"IT IS ESSENTIAL TO BALANCE THE INTERESTS OF CONSUMERS ON THE ONE HAND, AND SHAREHOLDERS AND INVESTORS ON THE OTHER, AND THE PRESENT APPROACH IS IN LINE WITH THIS OBJECTIVE," MRS CHAN SAID.

AS REGARDS THE GAS SUPPLY SECTOR, MRS CHAN EXPLAINED THAT FUEL GASES FOR HEATING AND COOKING PURPOSES WERE CURRENTLY SUPPLIED EITHER AS TOWNGAS AND SYNTHETIC NATURAL GAS (SNG) BY THE HONG KONG

CO. AND CHINA GAS

LTD. OR AS LIQUEFIED PETROLEUM GAS NUMBER OF OIL COMPANIES.

BY (LPG)

A

1.56 MILLION GAS CUSTOMERS IN HONG OR OR 45 PER CENT USED PIPED TOWNGAS USED PIPED LPG AND 610,000 OR 40 PER

THERE WERE APPROXIMATELY KONG, OF WHICH ABOUT 689.000 SNG,

OR 225,000

15 PER CENT CENT USED LPG IN CYLINDERS.

THE OIL COMPANIES HAD A 55 PER CENT SHARE OF THE MARKET IN TERMS OF NUMBER OF CUSTOMERS. BUT IN TERMS OF SALES OF GAS ENERGY, THE MARKET-SHARES OF LPG AND HONG KONG AND CHINA GAS CO. WERE ROUGHLY IN THE REGION OF 40:60.

MRS CHAN SAID THE GOVERNMENT RECOGNISED THAT HONG KONG AND CHINA GAS CO. WAS THE SOLE SUPPLIER OF TOWNGAS IN HONG KONG.

HOWEVER, LPG PROVIDED AN ALTERNATIVE CHOICE OF FUEL GAS AND BOTH TYPES HAD RESPECTABLE MARKET SHARES, AND CONSUMERS COULD ALSO CHOOSE ELECTRICITY AS A SOURCE OF ENERGY SUPPLY.

IT WAS THEREFORE NOT CONSIDERED NECESSARY ΤΟ INTRODUCE

CO. OR LEGISLATIVE CONTROL OVER HONG KONG AND CHINA GAS

TO PUT IT

UNDER A SCHEME OF CONTROL, SHE SAID.

"HOWEVER,

GOVERNMENT

WILL

MONITOR

THE

SITUATION

AND

THEN

UNDER SOME

FORM

CLOSELY. SHOULD THE COMPANY INCREASE ITS MARKET SHARE TO SUCH AN EXTENT THAT IT BECAME A VIRTUAL MONOPOLY IN THE GAS SUPPLY SECTOR IT IS FOUND TO BE OPERATING AGAINST THE PUBLIC INTEREST, CONSIDERATION WOULD BE GIVEN TO PUTTING THE COMPANY OF CONTROL, MRS CHAN SAID.

L

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