Tribunal dismisses first exemption appeal granted by the Commission

On 23 January 2012 the Competition Tribunal gave reasons for its decision to dismiss an appeal brought against an exemption granted by the Competition Commission to the South African Petroleum Association (SAPIA).

The exemption, granted in October 2011, relates to a set of agreements in the liquid fuel industry that were considered by the Commission as necessary to ensure the continuity and stability of the liquid fuels industry. The exemption period runs from October 2011 to December 2015.

In November 2011, Gas2Liquids appealed the decision of the Commission and sought to have the exemption set aside. Gas2Liquids based its appeal on several grounds, alleging that the Commission had failed to:

  • properly investigate the application for the exemption;

  • consider that smaller competitors would be excluded from the market as a result of the exemption;

  • investigate less anti-competitive alternatives; and

  • evaluate other legislation and policies that affect the industry.

The Tribunal dismissed Gas2Liquids' allegations on the basis that by the very nature and scarcity of the product in question, the coordination of access is necessary to ensure the stability of the industry.

In addition, the Tribunal stated that the decision of the Commission not to extend the exemption to all market participants cannot be faulted. Instead, the Commission's attempt at reaching a compromise by requiring SAPIA to extend its membership to both existing and potential players on fair, reasonable and transparent grounds is sensible. The Tribunal stated that Gas2Liquids had failed to show that the exemption granted by the Commission allowed SAPIA to conduct anti-competitive activity not covered by the exemption.


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