Demands for oil price transparency

Demands for oil companies to be more open about their pricing policies intensified yesterday.

Deputy Secretary for Economic Services Maria Kwan Sik-ning said authorities were encouraged by the recent news that one firm had decided to be more transparent about its price-setting mechanism but more had to be done.

Shell Hong Kong earlier announced it would increase the frequency of its liquefied petroleum gas price reviews, from once to twice a year.

Ms Kwan welcomed the move and hoped others would follow suit. But she said the Government had no wish to dictate prices.

Dr Larry Chow Chuen-ho, director of the Hong Kong Energy Studies Centre at Baptist University, said the setting of oil prices had always been a closely-guarded secret.

'It has been impossible for an outsider to determine whether the oil companies are making unfair profits or not, in the absence of concrete data relating to the operating expenses and profit margins of their local business in Hong Kong,' he said at a seminar on oil prices. The oil companies had been reluctant to release such data, he said.

Dr Hung Wing-kit of the Hong Kong Polytechnic University said oil products had seen the largest price increase among developed and neighbouring countries in the past decade.

'In the case of leaded petrol, the selling price in Taiwan and Britain ranges from three times to 4.5 times the import price and Hong Kong is now 7.7 times the import price; the average annual price increase is 14 per cent while in Britain it is 7.8 per cent and Taiwan 2.3 per cent,' he said.