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Commission probes Sasol
24/08/2001 13:19 - (SA)
Wambui Chege
Johannesburg - The Competition Commission has begun an investigation into synthetic fuel producer Sasol (share code: SOL) after allegations of abuse of local fuel supply arrangements.
The Commission launched the inquiry because "it seemed there was reasonable suspicion of possible contravention of the competition act by Sasol", Compliance Manager Astrid Ludin said.
A Sasol spokesperson said the company declined to comment at this stage.
"We will issue a comment when we are ready," the spokesperson said, but added he could not say when that would be.
Sasol is locked in a dispute with black-owned fuel firm Tepco over its fuel supply arrangements which Tepco say are contrary to a new industry charter promoting black economic empowerment.
Under existing industry regulations, retailers have to buy fuel from Sasol based on their market share of the local retail market.
Tepco says the arrangement, which involves purchasing petroleum products from Sasol's inland refinery and selling it at its coastal outlets, puts it at a disadvantage and blunts efforts to boost black-owned firms.
"The issues which raise concern for the commission and which will be investigated are primarily the alleged abuse of Sasol, in particular the requirement in its contract that ties unrelated products to supply," the Commission said in a statement.
"A major concern for the commission is the facilitation of market access, especially for the historically disadvantaged," the statement added.
Other issues to be investigated include allegations of price discrimination - where Tepco claims it receives shorter credit periods than other customers, the commission said.
"Finally, the Commission will also examine broader industry issues relating to vertical integration and the possible exclusion of other players that may be promoted thereby , as well as broader industry supply agreements," it said.
Ludin said the investigation would take at least a year.
The local energy industry estimates that black-owned companies hold 5.2% of assets in the domestic fuel industry and receive 3.2% of annual operating profits.
The charter signed by BP, Shell, Caltex, TotalFinaElf, Saso and big retailer Engen, seeks to transfer a 25% equity stake in the oil industry to black-owned firms by 2010.
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South Africa
