South Africa's anti-trust body warns LPG wholesalers on supply deals
CAPE TOWN (Reuters) — South Africa’s anti-trust body said it would open a case against wholesalers of liquefied petroleum gas (LPG) if they ignored recommendations to end long-term supply agreements by Sept. 30, senior officials told lawmakers on Tuesday.
South Africa’s Competition Commission in April said supply agreements should be capped at 10 yr because deals lasting longer favored big wholesalers and deterred new entrants into the market.
“We are going to have to open a case against wholesalers if the exclusive agreements persist beyond 30 September,” commissioner Tembinkosi Bonakele told parliament.
“It is not ideal that we open a case on this because it is going to take time and we are going to be engaged in a very acrimonious litigation with the industry,” he said.
The Competition Commission launched an inquiry in 2014 into the LPG sector, where 90% of the wholesale market is shared between Afrox, Easigas, Totalgas and Oryx Energies.
LPG, widely used for cooking, is produced at South Africa’s five refineries with competition from imports limited by regulations and inadequate infrastructure that make importing the fuel costly.
Reporting by Wendell Roelf; Editing by Ed Stoddard and Andrew Heavens
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