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 liquified petroleum gas (LPG) from import terminals in the Western Cape.
The commission found that Vita Gas allegedly contravened the Competition Act and exploited its market dominance by entering into an exclusive agreement with the only LPG terminal in the Western Cape – the Saldanha Bay-based Sunrise Energy import and distribution facility.
The commission says the exclusive agreement prevents 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.
In doing so, Vita Gas contravened Section 8(1)(d)(i) of the Competition Act.
Commissioner Doris Tshepe says 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.
“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.”
Vita Gas imports LPG, propane and butane into Southern Africa by ship, subsequently selling this to any licensed customer in small or large volumes.
The commission notes that the Western Cape is almost entirely reliant on imported LPG which comes through the Sunrise terminal facility, which comprises a multi-buoy mooring system, subsea and overland pipeline, storage and blending facilities, as well as truck loading facilities.
Going forward, the commission is seeking an administrative penalty, declaratory and interdictory relief against Vita Gas.