The Competition Commission of India (CCI) has issued order against South Asia LPG Company Pvt. Ltd. (SALPG) over ‘abuse of dominant position’ for terminalling services at Visakhapatnam Port. A penalty of INR 19.07 (USD 2.77 million) has also been imposed on SALPG for indulging into the anticompetitive conduct.
The case primarily concerned access to upstream LPG terminaling infrastructure at Vishakhapatnam Port, which comprises several components, such as unloading arms at the jetty, blender, heat exchanger and cavern (storage facility).
This infrastructure, being operated by SALPG -a joint venture between Hindustan Petroleum Corporation Limited (HPCL) and Total Gas & Power India (TGPI)- is used for handling imports of propane and butane and their blending into LPG.
East India Petroleum Pvt. Ltd. (EIPL) filed an information with CCI under Section 19(1)(a) of the Competition Act, 2002 (Act) alleging that while allowing it to use the blender, SALPG has been insisting on mandatory use of cavern, which resulted inpaying significant charges to SALPG.
As such, the LPG terminaling services offered by EIPL were not found economically viable and were constrained to avail the terminaling services offered by SALPG only.
After a detailed investigation by the Director General, CCI conducted further inquiry in the matter and found SALPG enjoys dominant position in the market for upstream terminaling services at Visakhapatnam Port. SALPG sought to justify its conduct on the grounds of safety as well as efficiency and business justification.
However, after a detailed examination of claims made and hearing the parties, the Commission held the impugned conduct of SALPG to be in contravention of the provisions of Section 4 of the Act.
