India’s Competition Commission has issued an order against South Asia LPG (SALPG) for abuse of dominant position for terminalling services at Visakhapatnam Port.
The Commission has subsequently imposed a penalty of INR 190.7 million (USD 2.77 million) on the company, which is a 50:50 joint venture between Hindustan Petroleum Corporation Limited (HPCL) and Total Gas & Power India (TGPI).
The case primarily concerned access to upstream LPG terminalling infrastructure, which comprises several components, at Vishakhapatnam Port. The infrastructure, being operated by SALPG, is used for handling imports of propane and butane and their blending into LPG.
East India Petroleum (EIPL) filed an information with CCI alleging that while allowing it to use the blender, SALPG has been insisting on mandatory use of cavern. This resulted in paying significant charges to SALPG.
Thus, the LPG terminalling services offered by EIPL were not economically viable and were constrained to avail the terminalling 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 terminalling services at Visakhapatnam Port.
SALPG justified its conduct on the grounds of safety as well as efficiency and business justification, however, the Commission held the impugned conduct of SALPG to be in contravention of the provisions of Section 4 of the CCI under Section 19(1)(a) of the Competition Act, 2002.