New Zealand's consumer watchdog Commerce Commission said Thursday that it was taking Shell Oil to court over claims that the company's petrol was more economical for motorists, dpa reported.
The commission will lay charges under the Fair Trading Act after a two-and-a-half year investigation into Shell's Fuel Economy Formula, which the company advertises as "designed to take you further."
Shell New Zealand took out advertisements in major newspapers Thursday saying it would fight the case.
Mark Forsyth, the company's general manager for retail, said the product had been "extensively fleet tested and has shown a statistically significant average fuel economy benefit of 0.98 per cent when compared with untreated fuel."
Forsyth said that New Zealand's Advertising Standards Authority had already dismissed a complaint by rival oil company BP that Shell's promotion was misleading after the product was launched in May 2006.
Shell said it had co-operated with the commission's investigators and was disappointed that legal action was being taken.
Companies can be fined up to 200,000 New Zealand dollars (116,000 US dollars) on charges under the Fair Trading Act. It was not known how many charges would be laid against Shell.