Watchdog rejects offer on assets

 THE Independent Consumer and Competition Commission (ICCC) has declined to approve a proposal by Puma Energy PNG Ltd to acquire the assets of PNG Ground Services Ltd (PNGGS).

Commissioner and chief executive officer Paulus Ain said: “The ICCC was not satisfied that the proposed acquisition will not have, or will not likely to substantially lessen competition in the market for aviation fuel in PNG.” 

Ain said  the ICCC was also not satisfied that the likely public benefits ensuring from the proposed acquisition would outweigh the likely detriments to competition. 

Puma had submitted an application for authorisation to acquire all the assets of PNGGS from Airlines PNG.  

PNGGS is a wholly-owned subsidiary of Airlines PNG. It provides aviation refuelling services predominantly to APNG fleet of aircraft. 

The application was registered May 6 and the assessment of the application was done through a public consultation process where submissions and comments were sought from relevant stakeholders. 

ICCC invited submissions mainly from competitors, consumers/customers and government departments and agencies on the proposed acquisition. 

Only a few submissions were received, mainly from competitors and players in the aviation industry. Relevant parts of all submissions and comments were taken into consideration before the final decision was made. 

Ain said: “Acquisition of one supplier by another in a relatively stable market where the acquirer is the monopoly wholesale supplier of aviation fuel is not likely to result in price reductions of aviation fuel; hence won’t lower airfares and other follow-on effects.”