On 4 May 2017 the Hong Kong Competition Commission (HKCC) released a report outlining the findings of its study into the auto-fuel market in Hong Kong. The HKCC’s study commenced in April 2015 (before the Competition Ordinance took full effect) and was conducted in order to determine the state of competition in the market, and was partly triggered by news reports highlighting Hong Kong’s petrol prices as some of the highest in the world.
The HKCC concluded that while the auto-fuel market’s unique structure hinders high levels of competition and gives rise to perceptions that fuel prices in Hong Kong are expensive, it found no evidence of any anti-competitive behaviour. In other words, the fact that petrol prices in Hong Kong are high and consistent across oil companies is not conclusive of any anti-competitive conduct. The report identifies a number of underlying structural and behavioural characteristics which the HKCC believes to be hindering competition and which would likely have contributed to high auto-fuel prices in the territory. The report also makes recommendations, summarised in the HKCC press release, on how to address these issues with the aim of furthering competition in the market.
The Competition Ordinance does not give the HKCC any information-gathering powers to conduct market studies, which meant that the HKCC had to rely on the voluntary cooperation of the relevant stakeholders.
This prevented the HKCC from doing an in-depth analysis of retail margins. For example, it was noted that information on profits, operating costs and sales discounts were lacking, but the HKCC maintained that it obtained enough information to preserve the integrity of the report. Within the report, the HKCC recommends that its investigative powers be expanded in the market study context to enable it to compel the production of materials.