Monday, March 13, 2017

Monopoly fears in liquefied petroleum gas market - CYPRUS MAIL

March 13, 2017

The Commission for the Protection of Competition (CPC) has initiated a probe into the proposed formation of a new corporation, which it says raises concerns over the creation of a monopoly in the liquefied petroleum gas (LPG) market.

On December 2, 2016, the CPC received a notification of a proposed joint venture by the companies Hellenic Petroleum Cyprus Ltd, Petrolina Holdings (Public) Ltd, Synergas Cooperative Society and Intergaz Ltd.

The joint venture, Vlpg Plant Ltd, will engage in the construction and operation of the installation, storage and management of LPG on an industrial site within the Vassilikos industrial zone that will be rented from the state.
But in a meeting held in late February of this year, and having studied the notification, the CPC determined that the proposed combine “poses serious doubts as to whether it conforms to competition in the market.”

The CPC said at first sight it appeared Vlpg Plant Ltd could corner the market completely, given that the companies forming the joint venture are the only ones active in the LPG market.

Moreover, two of the companies – Petrolina and Synergas – jointly own storage installations in Paphos.

According to the CPC, the joint venture “would have both the capacity and incentive to abuse its dominant market position, hampering the expansion of the activities of other companies and potential competitors…”

In addition, the fact that the companies will merge their LPG storage and management operations could make it easier for them to collude in the LPG import market but also in the wholesale business.

As such, the CPC said it was opening a full investigation into the proposed joint venture, per the Control of Concentrations between Undertakings Law.