CCP approves PSO’s acquisition of up to 26.67% shareholding in PRLMarch 2, 2016
ISLAMABAD: The Competition Commission of Pakistan (CCP) has granted approval to the acquisition of upto 26.67% shares in Pakistan Refinery Limited (PRL) by Pakistan State Oil Company Limited (PSO).
PRL is a local refinery producing various refined petroleum products such as motor gasoline, kerosene, and diesel oil for supply to oil marketing companies, says a press statement issued here on Thursday. PSO is an oil marketing company engaged in the supply of refined petroleum products to end consumers.
The approval in form of an order under Section 11 read with Section 31 of the Competition Act, 2010 (the ‘Act’) was passed by a bench comprising Ms. Vadiyya Khalil, Chairperson, Mr. Ikram Ul Haque Qureshi, Member (Cartels & Trade Abuses, and Legal) and Dr. Shahzad Ansar, Member (OFT & Advocacy).
While passing the order, CCP has also disposed of a complaint filed by Hascol Petroleum Limited (Hascol) regarding potential discontinuation of supply of refined petroleum products by PRL to PSO’s competitors after the acquisition.
CCP observed that the acquisition of PRL’s shares by PSO would not substantially lessen competition in the market. It was noted that PRL’s share in the local refined petroleum product market was around 10% and that local refineries including PRL collectively supply less than 50% of the total demand of refined petroleum products in Pakistan while the rest is met by imports undertaken by Oil Marketing Companies (OMCs) themselves.
With imports being readily available, PSO would have no incentive to foreclose the supply of refined petroleum products from PRL to its competitors such as Hascol. Furthermore, with downstream petroleum industry heavy regulated by Oil and Gas Regulatory Authority, there is no chance of PSO raising prices for competitors or end consumers.
CCP further observed that Hascol’s concerns were not acquisition-specific. While disposing off Hascol’s complaint and allowing the acquisition, CCP directed both PSO and PRL not to engage in any form of exclusionary conduct, and to continue offering its refined petroleum products to other OMCs including Hascol on commercially viable and competitive terms.
In the event that any anti-competitive behaviour is brought to the knowledge of CCP, the parties in question would be proceeded against in accordance with the law, the press release said.