Government vows to ignite fuel supplier competition

The government is now mulling the creation of room for more companies to engage in the local fuel supplier market while amending consumer rights’ laws to curb price fixing behaviour, Macau’s Secretary for Economy and Finance, Lionel Leong Vai Tac, told legislators in a plenary session on Tuesday evening.
“By the time the concession contract for using the Ka-Ho Oil Terminal expires in 2018, we’ll have fully considered the storage demand for local fuel products and introduce more liberal terms in the concession contract,” Mr. Leong said when answering legislator Ho Ion Sang’s enquiry into the government’s monitoring of the pricing of the fuel products imported here.
“The terms will be: when the vacancy rate of the oil terminal has reached a certain percentage, more new operators can be introduced to the local fuel supplying market,” the Secretary said, acknowledging that currently there is still room for more fuel importers to use the storage and transit base of petroleum products at Ka-Ho Oil Terminal, which has been exclusively granted to the state-owned Nam Kwong Petroleum & Chemical Co. Ltd. and only sees its concession expire in 2018.
In Macau, there are currently 39 suppliers and distributors of petroleum gas, of which 12 run a fuel import business, according to Mr. Leong.
“Although the companies set the retail price for their fuel in accordance with their various weight and other product specifications, the adjustment in the retail price is uniform amongst these companies to a certain extent,” Mr. Leong told legislators. “Our [cross-department fuel price monitoring] task force will continue to closely observe the trend of fuel product prices.”
The Secretary reiterated that the government expected to end price fixing and oligopoly with the amendment of the consumer rights laws, which should enter the legislation process by November this year.
Mr. Leong was responding to legislator Ho Ion Sang, who questioned in the Assembly that the retail pricing of local imported fuel products has not caught up with the down-adjustment seen in international fuel prices in recent months.
“According to the observations of our task force, the local petroleum gas suppliers and distributors adjust the products’ retail prices every quarter each year,” the Secretary said.
“The average retail price of fuel in Macau is costlier than Zhuhai but cheaper than Hong Kong,” he added. “For instance, in the first quarter of this year the average retail price of a liquefied petroleum gas cylinder was MOP13.4 (US$1.68) per kg; in Hong Kong it was about MOP22.9 and in Zhuhai about MOP8.6 per kg.”
The average import cost of petroleum gas here was about MOP6.85 per kg in February and March this year, according to data published by Macao Economic Services. In April, the average import cost for petroleum gas was MOP5.27 per kg.