By Robert Hart, Staff Reporter 
A FAIR Trading Commission (FTC) report on the gasolene trade has indicated that there is evidence that local marketing companies may have engaged in discriminatory pricing while providing fuel to retail outlets within the industry.
However, Mario Vulinovich, the chief representative for the nine marketing companies, says they have questioned those findings though considering the FTC report generally 'fair and balanced'.
According to the FTC's 104-page Report on the Supply of Gasoene in Jamaica, each of the marketing companies sells to its respective affiliated retail outlets at different prices.
"There is evidence to suggest that these marketing companies might be practising discriminatory pricing within their respective networks of retail outlets," the FTC said in the report dated September 29, 2004, and released this week by the Ministry of Commerce, Science and Technology.
The report contains the code of conduct which came into effect on Monday, for the marketing companies and nearly 300 retail outlets islandwide.
Among the marketing companies are ESSO Standard Oil S.A. Ltd., Shell Company (W.I.) Ltd., Texaco Caribbean Inc., and Total Jamaica Ltd. There are roughly 200 retailers which operate 278 retail outlets.
The FTC claimed that the differences in the prices charged to the retail outlets are not based on differences in the costs associated with supplying the outlets with fuel.
"These price differencials are not explained by a system of discounts which are available to all retailers," the commission added.
At the same time, however, the FTC acknowledged that the marketing companies had explained that the competitive nature of the industry was responsible for the price differentials.
COMPETITION
"Marketing companies indicated that prices charged to retailers are influenced by the intensity of competition within trading areas," the FTC said.
"...Prices charged to a particular retail outlet are reflective of the level of competition which that outlet faces."
Yesterday Mr. Vulinovich, who is also country chairman for Shell WI, said the marketing companies did not agree with the suggestion that there was price discrimination within the industry.
"They (marketing companies) have assured me that they do not practise any price discrimination," he said.
He noted that the report had failed to acknowledge that the cost of delivering fuel to outlets could be affected by factors other than distance and that trading zones are flexible.
The commission, in the code of conduct, has addressed the issue of discriminatory pricing by clearly stating that "a wholesaler shall sell to all retailers within the same trading area at the same price, except in situations in which discounts or price support are/is given to a dealer at the request of that dealer."
