ISLAMABAD
The Competition Commission of Pakistan (CCP) has granted a time-bound exemption on the relevant clauses of product supply agreement between Aramco Trading (ATC) Fujairah FZE Ltd and Gas & Oil Pakistan Ltd (GO Petroleum) for importing and selling Gasoline and diesel products to Pakistan.
ATC Fujairah, registered in the United Arab Emirates, is one of the world’s largest integrated energy and chemicals companies. Gas & Oil Pakistan Ltd, an Oil Marketing Company (OMC) registered in Pakistan that operates a network of retail outlets across the country that sell petrol, diesel, and lubricants.
Under the referred agreement, ATC Fujairah intends to meet GO Petroleum’s demand for essential petroleum products for its outlets, which primarily includes gasoline and diesel. The parties submitted to the CCP that this arrangement is expected to achieve economies of scale in procurement for GO Petroleum, potentially resulting in better prices for Pakistani consumers. Accordingly, the exemption sought was on exclusivity aspects of the commercial agreement to supply 100% demand of imported products for GO Petroleum’s retail outlets.
CCP while considering the matter sought information on how the arrangement will enhance distribution network and resultant benefits will translate for the consumers. It also sought the status of approvals from relevant regulators on fuel stations, fuel terminals and storage depots. CCP also considered how synergy between the GO Petroleum and ATC Fujairah will benefit the economy and consumers besides enhancing competition in the relevant market.
CCP grants exemptions pursuant to Section 9 of the Competition Act, 2010, inter alia ensuring that such exemptions have the economic benefits that outweigh the anti-competitive effects. Besides, this promotes economic progress for the benefit of consumers and results in improving production and distribution.
