Ain explains reason for regulating prices

THE Independent Consumer and Competition Commission (ICCC) says price regulation is applied to goods and services that are monopolised and benefits all consumers.
Commissioner and chief executive officer Paulus Ain said it was important to understand why the ICCC regulated prices of goods and services.
He said this while responding to queries from The National on whether the ICCC regulated the air fares of the country’s airline industry.
“The ICCC does not regulate the air fares of the airline industry,” he said.
“It is important to understand why the ICCC regulates or controls the prices of goods and services.
“Price regulation is applied to goods or services that are considered to be monopolies and at the same time, it must be considered to be a necessities for the benefit of all consumers.
“In the case of the airline industry, whilst it meets other requirements, it is not a monopoly as we have two strong competitors; Air Niugini and PNG Air.
“They are effectively competing in many routes.”
PNG Tourism Promotion Authority chief executive officer Eric Mossman recently said that the high cost of airfares in the country was an impediment to domestic travel and the growth of tourism.
Ain, however, said that there were many factors that could contribute to the high cost of air fares, but that was for the players in the industry to provide the details.
“We are of the view that the high fees and charges applied by government authorities: National Airport Corporation, Civil Aviation and Safety Authority, PNG Air services, Department of Transport and others need to be lowered then we will see some reductions in air fares,” he said.
“Half of the air fares we pay comes from these fees while half comes from the actual cost of the airlines.
“The Government needs to step in to tell its department and agencies to cut down the cost.”