Sunrise Energy said the Competition Commission’s recommendation this week that Vita Gas be fined for market dominance abuse would give other importers in the Western Cape an opportunity to utilise its terminal to import liquefied petroleum gas (LPG), which might lead to better gas prices.
Responding to further questions from Business Report following the commission’s referral of the matter to the Competition Tribunal, Sunrise CEO Monde Tyusha said yesterday that the decision might not necessarily lead to increased throughput through Sunrise’s import terminal, but it would ensure competition within the market. “Better pricing might result in increased market demand,” he said.
Sunrise owns and operates the terminal on an open access basis, meaning that capacity must be shared among all users and prospective users in proportion to their needs.
“Unfortunately Vita Gas’s actions precluded Sunrise from doing so and have also infringed on third party access to the terminal. In order to ensure that the terminal is operated in accordance with the law and in the best interests of the public, Sunrise was left with no option but to complain to the commission,” said Tyusha.
Vita Gas imports LPG, propane and butane into southern Africa by ship. It sells to any licensed customer. The Sunrise terminal is the only LPG terminal in the Western Cape and is located at Saldanha Bay. The province is almost entirely reliant on imported LPG that comes through the Sunrise terminal facility. The terminal comprises a multi-buoy mooring system, subsea and overland pipeline, storage and blending facilities, and truck-loading facilities.
Efforts to obtain further comment from Vita Gas yesterday were not successful.
The commission found that Vita Gas, by entering into an exclusive agreement with the only LPG terminal facility in the Western Cape, was in contravention of the Competition Act.
“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,” said competition commissioner Doris Tshepe in a statement.
Sunrise Energy’s terminal’s operations began in 2017 after its R1.2 billion development cost was funded by its major shareholder, the Industrial Development Corporation and Public Investment Corporation.
BUSINESS REPORT