CCP fines edible oil tanker owners’ body Rs60mn for cartelisation

The Competition Commission of Pakistan (CCP) has fined the All Pakistan Edible Oil Tanker Owners Association (APEOTOA) Rs60 million for engaging in cartelization practices. These practices include fixing transportation charges and allocating business through a restrictive queue system, which violates Section 4 of the Competition Act, 2010.

The commission imposed additional penalties of Rs30 million for price fixing and market allocation. The investigation began in August 2024 following market surveillance that uncovered circulars fixing transportation rates for edible oil, ghee, and fats moving from Karachi ports to various destinations across Pakistan. The commission discovered that APEOTOA revised transportation rates 89 times between 2019 and 2025, with 52 increases and 37 decreases.

The association's rate adjustments were communicated through circulars issued by the Pakistan Vanaspati Manufacturers Association (PVMA). APEOTOA representatives admitted that transportation rates were determined collectively between the two associations. The CCP rejected APEOTOA's claim that its rate circulars were simply advisory, arguing that even non-binding recommendations can limit competition by influencing members' commercial decisions.

The commission also referred to the Supreme Court's judgment in the PVMA case, which emphasizes that competitors must retain the freedom to independently set their prices. Additionally, the CCP found that APEOTOA's queue system allocated consignments among tanker owners, preventing independent competition for business. The association issued "parchis" to lift consignments and enforced compliance with the system.

A September 2023 circular imposed a Rs500,000 fine for each tanker and owner who violated allocated conditions. The CCP determined that APEOTOA had significant market power, the pricing conduct lasted nearly six years, senior management was involved, and rate revisions continued even after enforcement actions started. The association is now required to cease anti-competitive practices, recall existing price circulars, and discontinue the queue system.

It must publicly clarify that tanker owners can independently set transportation rates and lift consignments, regardless of association membership. The penalty must be paid within 60 days, with an additional Rs 50,000 per day penalty if non-compliance occurs, and possible criminal proceedings under Section 38.