Competition watchdog seeks Sasol fine for overpricing

South Africa’s competition watchdog on Thursday proposed fining a subsidiary of petrochemicals group Sasol 10% of its turnover for charging excessive prices for polypropylene and propylene.

The Competition Commission said it had referred complaints of collusion and excessive pricing by Sasol’s subsidiary, Sasol Chemicals Industries, and plastics manufacturer Safripol to a tribunal for final adjudication.

“The commission found that Sasol had charged excessive prices for polypropylene and propylene to its local customers in line with import parity pricing,” the watchdog said in a statement.

The commission is seeking a penalty of 10% of SCI’s annual turnover for each of these contraventions.

The turnover for SCI for the financial year 2009 was R22,13-billion.

The commission said Sasol had abused its position as a dominant supplier of propylene and polypropylene and a major exporter of polypropylene.

“One would therefore have expected pricing to local customers to be on the same basis as export prices, however, this is not the case,” it said.

The watchdog said it had reached a settlement with Safripol after the company admitted that the supply agreement between Sasol and Safripol and its implementation amounted to price-fixing.

Safripol had agreed to pay a R16,5-million penalty, which represents 1,5% of its total annual turnover derived from polypropylene products.—Reuters