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Commission looks to tribunal to fine Vita Gas for limiting access to LPG import facility

Commission looks to tribunal to fine Vita Gas for limiting access to LPG import facility

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The Competition Commission wants to prosecute Vita Gas for limiting access to liquefied petroleum gas (LPG) from import terminals in the Western Cape.

Vita Gas imports LPG, propane, and butane into southern Africa by ship. Vita Gas sells to any licensed customer that wishes to buy small or large volumes.

The Competition Commission said last Friday it had referred to the Competition Tribunal a complaint against Vita Gas for the alleged abuse of market dominance in the supply of LPG from import terminals in the Western Cape.

The Sunrise Energy terminal, located at Saldanha Bay, is the only LPG terminal in the Western Cape.

The commission found that Vita Gas, by entering into an exclusive agreement with Sunrise Energy, which had contravened the Competition Act.

The Commission said it had investigated the matter after a complaint filed by Sunrise and found that Vita Gas was dominant in the relevant market, being the only supplier of LPG from import terminal facilities in the Western Cape since 2021.

The commission further found that the exclusive agreement prevented competitors of Vita Gas 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 is seeking an administrative penalty, declaratory and interdictory relief against Vita Gas,” it said in a statement yesterday.

Generally, the base amount of an administrative penalty is imposed with reference to the firm’s affected turnover.

“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. Naturally, exclusive agreements may, in certain circumstances, be anti-competitive and may impede the greater participation of new and emerging players,” it said yesterday.

Competition Commissioner Doris Tshepe said, “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.”

The Western Cape is almost entirely reliant on imported LPG which comes through the Sunrise terminal facility. The Sunrise LPG terminal facility comprises a multi-buoy mooring system, subsea and overland pipeline, storage and blending facilities, as well as truck-loading facilities.

Earlier this year Sunrise Energy’s CEO Monde Tyusha said that since 2017, Sunrise Energy had seen a substantial increase in the volume of LPG moving through its Saldanha Bay terminal.

Volumes more than doubled from 52 016 tons in 2018, the first full operational year, to 129 544 in 2021. During this period, Sunrise Energy had recorded an average year-on-year growth of 36 percent in LPG volumes moving through the terminal. And since operations began in May 2016, the terminal has facilitated more than 500 000 tons of LPG imports into the country and beyond.

BUSINESS REPORT

Original Article

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