South African Watchdog To Fine Gas Importer For Cornering Market

The Competition Commission has referred to the Competition Tribunal a complaint against Vita Gas for the alleged abuse of market dominance in the supply of liquefied petroleum gas (LPG) from import terminals in the Western Cape.

The commission found Vita Gas contravened the Competition Act by entering into an exclusive agreement with the only LPG terminal facility in the Western Cape, which prevented competitors from entering or expanding into the market.

In referring the case to the Tribunal, the commission is seeking an administrative penalty as well as declaratory and interdictory relief against Vita Gas.

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Through the Sunrise terminal – the only LPG terminal in the Western Cape – Vita Gas imports LPG, propane, and butane into southern Africa by ship and sells product to any licensed customer that wishes to buy small or large volumes.

In a statement, the commission said it found that Vita Gas was dominant in the relevant market and its exclusive agreement with the terminal prevented competitors from gaining access to the Sunrise terminal facility and services “in a manner that would enable them to import LPG at a sufficient scale to enter into, participate in, or expand in the market”.

“The commission seeks to unlock competition and to facilitate new entry in the market for the supply of LPG in the Western Cape through this complaint referral,” said Competition Commissioner Doris Tshepe.

“The commission is of the view that this agreement prevents or excludes other LPG importers from using the only LPG terminal import facility in the Western Cape, thus limiting competition in the market for the supply of LPG in the coastal province.”