CCCS consults on City Energy’s proposed acquisition of local LPG business
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Michelle Zhu
THE Competition and Consumer Commission of Singapore (CCCS) is inviting public feedback on City Energy’s intended acquisition of Tan Soon Huah Gas Supply’s liquefied petroleum gas (LPG) business.
City Energy is the sole producer and retailer of town gas in Singapore. It is also the trustee of City Energy Trust, a wholly-owned subsidiary of Keppel Infrastructure Trust.
On Thursday (Jun 8), CCCS said it accepted a May 30 application from City Energy for a decision on whether its proposed acquisition would result in a “substantial lessening of competition within any market in Singapore”.
City Energy indicated that this will not be the case as a merged entity would face “competitive constraints” due to the presence of strong LPG, natural gas and electricity competitors in relevant markets.
There are also no significant barriers to entry to the merged entity’s relevant markets save for town gas, said the group, adding that potential entrants will therefore likely be able to enter “relatively quickly on a material scale”.
Consumers are also able to switch “easily” between suppliers in relevant energy markets given the low cost and time required to do so, in City Energy’s view.
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This is also considering the Energy Market Authority’s regulation of town gas retailing activities via the Gas Act, which limits City Energy’s pricing power.
Both City Energy and Tan Soon Huah overlap in the market of the retail supply of LPG, town gas, and electricity to residential, commercial and industrial customers in Singapore.
The two parties also overlap in the market for the retail supply of natural gas to industrial customers in the city-state.
More information on the public consultation may be accessed via CCCS’s website under “Public Consultation”.
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