Vita Gas found guilty of restricting access to LPG import facility

The Competition Commission has prosecuted importer and supplier of liquified petroleum gas (LPG) Vita Gas for limiting access to the only LPG import terminal in Saldanha Bay, Western Cape, after it entered into an exclusive agreement with the terminal.

The LPG terminal is owned by Sunrise Energy.

This, after the commission on Friday (28 October) referred a complaint against the company to the Competition Tribunal concerning the alleged abuse of market dominance in the supply of LPG.

In a statement issued on Wednesday, it said: “The commission investigated the matter pursuant to a complaint filed by Sunrise and found that Vita Gas was dominant in the relevant market, being the only supplier of LPG from import terminal facilities in the Western Cape since 2021.”

The commission says it also found that the exclusive agreement prevents competitors of Vita Gas from gaining access to the terminal facility and services that would enable them to import LPG at a sufficient scale to enter, participate or expand in the market.

“The commission is seeking an administrative penalty, declaratory and interdictory relief against Vita Gas,” it adds.

Commissioner Doris Tshepe says, following the complaint, the commission intends to unlock competition and facilitate new entry in the market for the supply of LPG in the Western Cape.

“Naturally, exclusive agreements may, in certain circumstances, be anti-competitive and may impede the greater participation of new and emerging players.

“The commission is of the view that this agreement prevents or excludes other LPG importers from using the only LPG terminal import facility in the Western Cape, thus limiting competition in the market for the supply of LPG in the coastal province.”

The commission says Vita Gas sells to licensed customers wishing to buy small or large volumes.

It says the Western Cape is almost entirely reliant on imported LPG which comes through the Sunrise terminal facility. The facility features a multi-buoy mooring system, subsea and overland pipeline, storage, blending and truck loading facilities. 

Nondumiso Lehutso is a Moneyweb intern.