A complaint against Kuo Tung Gas Station Co., for the announcement of NTD 3 per liter price reduction at gasoline station which is inconsistent with the fact, a suspicious violation of the Fair Trade Law

Chinese Taipei

Case:

A complaint against Kuo Tung Gas Station Co., for the announcement of NTD 3 per liter price reduction at gasoline station which is inconsistent with the fact, a suspicious violation of the Fair Trade Law

Key Words:

gasoline, price, accumulated points in exchange for gift

Reference:

Fair Trade Commission Decision of May 26, 2005 (the 707th Commissioners' Meeting); Disposition (94) Kung Ch’u Tzu No. 094056

Industry:

Other Petroleum and Coal Product Manufacturing (1990)

Relevant Laws:

Article 21(1) of the Fair Trade Law

Summary:

1. The general public, Mr. Liao wrote a complaint letter to the Fair Trade Commission, briefly stated as: On May 9, 2004, the complainant went to the gasoline station of the punished (located at No. 8, Section 1, Ta Hsueh Road, Tou Liu City) at Tou Liu City, Yunlin County to fill up the gas tank. The staff at the aforementioned gasoline station told Mr. Liao he can choose either price reduction or giveaways for the fill-up. If he chooses price reduction, the price of the gasoline can be lowered by NTD 3 per liter in cash payment. However, the complainant stated the invoice for the fill-up showed that the price of 92 unleaded gasoline is NTD 19.5 per liter but the market price of 92 unleaded gasoline at that time is NTD 21.5 per liter, there is NTD 2 difference between the invoice price and the market price. The sign of “cash discount of NTD 3 for gasoline fill-up” as announced by Kuo Tung Gas Station Co. is inconsistent with the fact, a suspicion of deceiving consumers.
2. Upon the investigation, the Fair Trade Commission found that Kuo Tung Company has separately increased the retail’s reference prices of China Petroleum’s 95 and 92 unleaded gasolines by NTD 1 between the period of August 9, 2003 and February 18, 2005. The increased prices were then used as the quotations of various gasoline products and a price reduction promotion was carried out at the same time. For a long time, the retail’s reference prices quoted by China Petroleum Company are commonly known to the general public as the prices of gasoline products since China Petroleum Company was the sole supplier in domestic gasoline market for years prior to September 1999. Therefore, with regard to the actual trading prices for cash payment of gasoline fill-up, although Kuo Tung Company has lowered the self-determined retail quotation by NTD 3, but the company in fact has increased the long and commonly known gasoline retail reference prices of China Petroleum Company by NTD 1 prior to the price reductions. There is a great difference between the announcement of “cash discount of NTD 3 for gasoline fill-up” of Kuo Tung Company and the commonly and publicly known retail reference prices of China Petroleum as the basis of price reduction promotion. Unless the consumers have paid special attentions at the time of gasoline fill-ups, there is no way to discern the basis of price reductions. Kuo Tung Company determined its own retail price quotation and used it as the basis of price reduction promotion. Also, Kuo Tung Company has not simultaneously disclosed the price information on the advertisement signboard of price reduction promotion, thus causing the general public and consumers to have misunderstanding in the case that they have only paid regular attentions. Hence, the intention of Kuo Tung Company’s advertisement at issue to mislead consumers is clear, in violation of Article 21 (1) of the Fair Trade Law.

Summarized by Lin, Hsiao-Hung;
Supervised by Lin, Gin-Lan

Appendix:
Kuo Tung Gas Station Co., Ltd.’s Uniform Invoice Number: 16516904