CCI to probe alleged cartelisation in petrol pricing

Also probing cases for anti-competitive issues, but not to look into air fare pricing

Fair trade regulator Competition Commission of India (CCI) will "very soon" finalise the probe into alleged cartelisation among oil marketing companies in fixing petrol prices.

CCI Chairman Ashok Chawla today said the regulator was in the process of finalising the probe against oil marketing companies with regard to alleged cartelisation in fixing prices of petrol.

"We are in the process of finalising the probe very soon," Chawla said. "We are in the process of sending them an order which will ensure that there is investigation to see what is happening in terms of petrol prices," he told reporters here.

Earlier, CCI had written to the Petroleum Ministry on the issue, but the Ministry said it had no role in deciding the price of petrol as it was a deregulated commodity.

Meanwhile, regarding the case of alleged abuse of dominant position by Coal India, Chawla said CCI has received the investigation report from its Director General (DG).

"The Commission as a whole will look at the matter and then take a decision," he said. DG is the investigation arm of the CCI. It probes cases where the Commission has found prima facie evidence of violating competition norms.

Probing 26 cases for anti-competitive issues
CCI is also probing about 26 cases for alleged anti-competitive issues as complaints of unfair market practices show a rise, Chawla said.

Citing the rise in information received by it, Chawla said that awareness about competition norms is increasing in the country.

CCI keeps a tab on anti-competitive practices across sectors.

"About 25-26 case are currently under the investigation of the DG," Chawla said. DG is the investigating arm of the fair trade regulator. Noting that the Commission has responded to cases within a reasonable time frame, he said the amount of information being received by it has increased in the past few months.

If the Commission was receiving information (related to possible anti-competitive practices) six or seven times in a month, Chawla said that in last few months, the numbers have gone up by "25-30 per cent".

According to him, the regulator has dealt with around 340 cases related to anti-competitive agreements and abuse of dominant position in the market.

"Almost in half of them, the Commission did not find any prima facie evidence of violation of competition rules and did not proceed to the investigation stage," he said while addressing a conference on competition law organised by industry body Assocham.

The Commission has so far dealt with around 116 cases with regard to mergers and acquisitions (M&As). None of them required Phase-II investigations that pertains to market issues post transaction, Chawla said.

Speaking on the occasion, Competition Appellate Tribunal Chairman Justice V S Sirpurkar emphasised on the need for creating more awareness in the society about competition norms.

Going forward, he said that number of appeals against CCI orders are likely to increase. Delving into various aspects of competition rules and its enforcement, Chawla said that CCI has decided to put out the rationale behind imposing penalties along with its orders.

No reason now to look into pricing of air tickets
Emphasising that movement of airfares are determined by supply and demand, CCI said that at present it has no reasons to intervene in the issue of ticket prices fixed by airlines.

The fair trade regulator's comments comes against the backdrop of many airlines recently slashing airfares to attract more passengers.

When asked about airfares movement, Chawla said this was something that is determined by the market.

"As far as we (CCI) are concerned, as on today, there is no reason perhaps to intervene," he told reporters.

According to him, the Commission had looked into the issue of airfares. "Our finding was that the upward or downtrends in passenger fares is due to demand and supply. We have not found any evidence of any combined action or cartelisation by airlines. Our assessment is the market is functioning as it should...," he noted.

Earlier this week, CCI had ruled that government or the aviation regulator cannot be asked to cap the flight ticket prices as that would go against the spirit of competition in the sector.

"Today, the forces of demand and supply govern the air fares. Whenever supply is more and demand is less, air fares fall and in lean season the airlines do decrease air fares," the regulator said in an order on March 14.

The order was passed following a complaint against the Directorate General of Civil Aviation (DGCA) and the Ministry of Civil Aviation, wherein they were accused of not having evolved a pricing policy of air tickets like Railways and State Transport Corporations so as to fix MRP of airfares to be charged from passengers by various airlines.

Disposing off the complaint, CCI had said the complaint does not raise any competition issues and "it is only when demand is more and supply is less that the airlines venture to increase the air fares".

"The Commission can neither go into the issue of MRP, that is what should be the MRP for any product or service and fix the MRP, nor the Commission can give direction to the Government of India that it should fix MRP of a service being provided by private entrepreneur. "In fact that will be contrary to the spirit of competition law," it had said.