The Competition Commission of Pakistan (CCP) has constituted a full bench for hearing a complaint of cartelisation against Jamshoro Joint Venture Limited (JJVL) and LPG Association. Sources said however, the date of hearing has been extended to June 9, giving them more time to appear before the commission.
Earlier, the hearing was fixed for May 19. The decision to constitute a full bench was taken by the CCP in a meeting held recently. An official told BR on condition of anonymity that the CCP has made it clear to the JJVL and LPG Association that hearing date would not be extended any further. The date he said was extended on their request twice but now it won't be extended.
He said that the CCP after taking a suo motu notice had served show cause notices on JJVL and LPG Association under section 30 of the Competition Ordinance, 2007 on March 20 for allegedly abusing their dominant positions with the purpose of fixing LPG prices of their own choice and prevent competitors from entering the market.
Progas Pakistan Limited had raised the issue through a letter to the Oil and Gas Regulatory Authority (Ogra), copy of which was also sent to the CCP, alleging cartelisation and exclusionary conduct in the LPG sector under the auspices of LPG Association.
The CCP taking notice of the letter had initiated an inquiry against the JJVL and LPG Association under section 37 (1) of the Ordinance and found that they were deliberately evolving a pricing mechanism to keep importers out of the market.
The show cause notice that was served on them alleged that collusion and collaboration in price fixing of LPG is substantiated inter alia from the fact that many directors of JJVL and their relatives are directors or owners of marketing companies who are members of LPG Association. The chairman of JJVL is also the chairman of LPGA, which operates from the JJVL office in Lahore.
Thus it prima facie establishes a collusive nexus between JJVL and LPGA in terms of enquiry report. The inquiry also reveals that JJVL is a dominant undertaking in the LPG market since it has 37.5 percent share in the market, coupled with its entitlement to access LPG sources at reduced costs and enjoys control along with its subsidiaries - Mehran LPG Private Limited and Lub Gas.