PSO Bullying Contractors: Competition Commission Starts Probe

By Ali Ahmad · Thursday, Aug 9, 2012 1 Comment

Pakistan State Oil, country’s largest oil marketing company, is slowly turning itself into a stubborn corporate bully. But what have they done now? According to market sources, Competition Commission of Pakistan has started after receiving multiple complains from PSO contractors, alleging that PSO is forcefully selling lube oil to them by deducting the price of such products from the payments due for cartage services.

This is not the first time PSO is facing negative reviews in newspapers and blogs. Four months ago, PSO was alleged for supplying low quality fuel products. And almost a week ago, Pakistan State Oil was accused of violating OGRA notification and was alleged for charging higher Diesel prices to consumers.

Given the potentially anti-competitive nature of such actions, CCP has started to probe the matter in detail and solicited PSO’s response in the matter. However, despite a reminder, the reply is still awaited.Forced sale of products may constitute an anti-competitive practice prohibited by the Competition Act, 2010.

The practice of forced sales, which places unrelated obligation on trading parties for the conclusion of contracts, is barred under law and can amount to a prohibited agreement/practice or an abuse of dominance under the Act.

It would be pertinent to mention here that CCP has consistently strived to promote competition and curb anti-competitive behavior in Pakistan economy although recently they were striked back by Pakistani banks who were charged with a penalty of Rs 77 Crore. Banks requested the court to declare the Competition Commission of Pakistan in its present form is an institution without any lawful authority.