The Competition Commission has made a call for submissions in terms of its enquiry into the liquefied petroleum gas (LPG) industry, giving stakeholders until October 31 to submit their comments.
The aims and rationale of the three-phase market inquiry – of which the commission expected to release the results in March 2016 – comprised understanding and promoting competition in the local LPG sector, which generated a turnover of about R1.5-billion a year from the manufacture and sale of about 300 000 t of LPG.
“The main aims [of the inquiry are to] examine whether the supply bottlenecks in the LPG sector may serve to create circumstances or incentives that serve to distort, prevent or lessen competition, [as well as to] analyse the current price regulatory framework and its impact on competition in the sector,” the commission stated in the enquiry’s terms of reference.
The commission planned to gather relevant information, data and evidence; research the industry background; review the regulatory framework and supply agreements along the value chain; and hold consultations with the relevant stakeholders during the first phase of the inquiry.
Phase 2 would see the commission define product and geographic markets, assess the competition dynamics in the defined markets and analyse factors impacting competition, before drawing conclusions on the state of competition.
In the third and final phase, it would publish a report on the state of competition in the LPG sector and engage with stakeholders on the recommendations made in the report.
In its call for submissions, the commission said stakeholders were now being asked to comment on the structural features of the LPG market, the regulatory environment, the limited use of LPG and the switching costs between suppliers.
However, the commission said comments on any other issues that could be relevant to the market enquiry and that were thought to impact on the state of competition in the sector could also be submitted.