| Tue 21 Feb 2012, 10:06 | | THEE - The Competition Commission - Two major oil companies settle bitumen |
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JSE
THEE
THEE - The Competition Commission - Two major oil companies settle bitumen
cartel case
The Competition Commission
MEDIA RELEASE
21 February 2012
Two major oil companies settle bitumen cartel case
The Commission has reached settlement agreements with two major oil
companies, namely Engen Petroleum Limited (Engen) and Shell South Africa
Marketing (Pty) Limited (Shell) in which they admit to having fixed the
price of bitumen with other oil companies by collectively determining and
agreeing on pricing principles, including a starting reference price and
monthly price adjustment mechanism. Engen has agreed to pay a penalty of
R28 800 000 and Shell has agreed to pay R 26 259 480.
These settlement agreements follow the Commission`s referral on 04 March
2010 of its findings against the Southern Africa Bitumen Association
(SABITA) and seven major oil companies namely, Chevron SA (Pty) Ltd, Engen,
Shell, Total SA (PTY) Ltd, Masana Petroleum Solutions (Pty) Ltd, Sasol
Limited and Tosas (Pty) Ltd to the Tribunal for adjudication. The
Commission did not seek a penalty from Sasol and its subsidiary, Tosas,
which were granted conditional immunity following the leniency application
filed with the Commission by Sasol on 12 January 2009. Subsequent to the
referral, the Commission previously concluded settlement agreements with
Masana and SABITA in 2010 and 2011, respectively.
Bitumen is one of the by-products from crude oil refining. Bitumen and
modified bitumen products are used to surface and rehabilitate roads, as
waterproofing products and to suppress dust. The end customer of bitumen is
mainly government road agencies and municipalities.
This case was initiated following information received from Sasol and its
subsidiary Tosas in the leniency application. In its investigation the
Commission found that the oil companies entered into an agreement and
engaged in collusive conduct from around 2000 until at least December 2009.
The conduct included the exchange of competitively sensitive information
relating to the pricing of bitumen and associated products, and the use of
an agreed pricing formula to set the wholesale list selling price of
bitumen. This was facilitated through meetings convened by the industry
association, SABITA, as well as correspondence through SABITA and direct
communication between oil companies.
The Commission has filed these agreements with the Tribunal and awaits set
down for confirmation as orders of the Tribunal.
ENDS
For more information:
Molebogeng Taunyane, External Communication Coordinator
012 394 3289/082 646 8663 / molebogengt@compcom.co.za
Date: 21/02/2012 10:06:47 Produced by the JSE SENS Department.
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