CCP Fines Edible Oil Tanker Association Rs. 60 Million

The Competition Commission of Pakistan has imposed a fine of Rs. 60 million on the All Pakistan Edible Oil Tanker Owners Association for engaging in anti-competitive practices. The association was found to have fixed transportation charges and allocated transport business among its members through a queue-based system, violating Section 4 of the Competition Act, 2010.

This practice restricted competition in the market for transporting edible oil, ghee and fats from Karachi's Port Trust and Port Qasim to destinations across Pakistan.

The commission discovered that transportation rates had been collectively revised 89 times over a six-year period, with 52 increases and 37 reductions. The CCP also found that the rates circulated by the Pakistan Vanaspati Manufacturers Association aligned with those issued by the tanker association, supporting the conclusion that transport charges were collectively determined.

A significant issue was the formula used to adjust charges based on diesel prices, which resulted in a larger percentage increase when diesel prices rose compared to when they fell.

The association controlled access to transport business through a queue and ticket system, limiting the ability of individual tanker owners to compete freely. During an investigation in February 2025, the commission obtained rate circulars, agreements and computer data from the association, revealing its dominant position in the market with around 250 to 300 tankers visiting the ports daily compared to about 50 to 60 tankers from the National Logistics Corporation.

The CCP deemed the association's activities directly connected to the transportation of edible oil, ghee and fats, and calculated its market share at approximately 83 percent.

The commission has ordered the association to cease anti-competitive practices, withdraw existing price circulars, and publish notices stating that tanker owners can set their own transportation rates and collect consignments from ports regardless of membership in the association. The association must submit a compliance report within 60 days, with a daily penalty of Rs. 50,000 for non-compliance, which could lead to further legal proceedings.