Allegations against PSU OMCs

CCI in its assessment of the investigation report, at the outset, confirmed DG’s conclusion on the lack of culpability of PSU OMCs. In its opinion, CCI observed that the Government was a majority shareholder in each of the PSU OMCs. CCI primarily relied on the various efficiencies that resulted from the issuance of a joint tender. As per CCI’s observation, the issuance of joint tender by the PSU OMCs prevented wastage of money, time and resources that otherwise would have been spent, in the event that separate tenders would have been issued. More specifically, CCI observed that a joint tender ensured that the limited quantity of available Ethanol was equitably distributed among the OMCs. This was essential considering that in the event of inequitable distribution, certain OMCs would have been forced to procure Ethanol at higher prices (given the excessive demand and decreased availability of Ethanol). An inequitable distribution of Ethanol would also have resulted in potential anti-competitive effects, whereby OMCs with Ethanol may have sold Ethanol-blended petrol to the exclusion of the OMCs without Ethanol.  Lastly, CCI re-affirmed the scheme of Section 3(3) of the Act, to the extent that it only raised a rebuttable presumption of AAEC that may be sufficiently offset by demonstrable efficiencies etc.

Published In:Inter Alia Special Edition Competition Law Third Quarter 2018 [ English
Date: September 30, 2018