The Competition Commission has referred to the Competition Tribunal a complaint against Vita Gas for alleged abuse of market dominance in the supply of liquefied petroleum gas (LPG) from import terminals in the Western Cape.
The commission found that Vita Gas allegedly breached the Competition Act and exploited its market dominance by signing an exclusive agreement with the only LPG terminal in the Western Cape – Sunrise Energy’s import and distribution facility with located in the bay of Saldanha.
The commission says the exclusive agreement prevents Vita Gas’ competitors from accessing Sunrise’s terminal facilities and services in a way that would allow them to import LPG on a scale sufficient to enter, participate in or expand into the market
In doing so, Vita Gas breached Section 8(1)(d)(i) of the Competition Act.
commissioner Doris Tshepe says the commission seeks to unlock competition and facilitate new entry into the LPG supply market in the Western Cape through this complaint referral.
“Of course, exclusive agreements can, in certain circumstances, be anti-competitive and can prevent greater participation by new and emerging players.
“The commission considers that this agreement prevents or excludes other LPG importers from using the only LPG terminal import facility in the Western Cape, thereby limiting competition in the LPG supply market in the coastal province.”
Vita Gas imports LPG, propane and butane into South Africa by ship, and then sells it to any licensed customer in small or large volumes.
The commission notes that the Western Cape is almost entirely dependent on imported LPG that passes through the Sunrise terminal facility, which includes a multi-buoy mooring system, underwater and onshore pipelines, storage facilities and mixing as well as truck loading facilities.
Looking to the future, the commission requests an administrative sanction, a declaratory and interdictory sanction against Vita Gas.
