CCP fines edible oil tanker owners’ body Rs60mn for cartelisation

The Competition Commission of Pakistan (CCP) has imposed a Rs60 million penalty on the All Pakistan Edible Oil Tanker Owners Association (APEOTOA) for fixing transportation charges and allocating business among tanker owners through a restrictive queue system.

The commission said the practices violated Section 4 of the Competition Act, 2010, and imposed separate penalties of Rs30 million for price fixing and market allocation.

The case arose from CCP market surveillance, which detected circulars fixing transportation charges for edible oil, ghee and fats transported from Karachi ports to destinations across the country. The commission initiated a suo motu enquiry in August 2024 and conducted a search and inspection in February 2025.

According to the CCP, material recovered during the search showed that APEOTOA revised transportation rates 89 times between 2019 and 2025, including 52 increases and 37 decreases. Matching rate changes were communicated through circulars issued by the Pakistan Vanaspati Manufacturers Association (PVMA).

APEOTOA representatives also acknowledged that transportation rates were determined through an agreement between the two associations, the commission said.

The CCP rejected APEOTOA’s contention that its rate circulars were merely advisory, stating that even non-binding recommendations by a trade association can restrict competition if they influence members’ independent commercial decisions.

The commission also cited the Supreme Court’s judgment in the PVMA case, under which competitors are required to retain the freedom to independently determine their prices.

The commission separately found that APEOTOA’s queue system allocated consignments among tanker owners instead of allowing independent competition for business. The association issued “parchis” for lifting consignments and enforced compliance with the system. A September 2023 circular prescribed a Rs500,000 fine each for a tanker and its owner for violating specified allocation conditions, the CCP said.

The commission identified the relevant market as road transportation services for edible oil, ghee and fats across Pakistan.

In assessing the penalty, the commission considered APEOTOA’s substantial market position, the nearly six-year duration of the pricing conduct, senior management involvement, and continuation of rate revisions even after enforcement proceedings commenced.

APEOTOA has also been directed to immediately cease the anti-competitive practices, recall existing price circulars and discontinue the queue system having the effect of dividing the market. It must publish notices in two Urdu and two English national newspapers clarifying that tanker owners are free to independently determine transportation rates and lift consignments irrespective of association membership.

The penalty must be deposited and compliance reported within 60 days. Failure to comply may attract an additional penalty of Rs 50,000 per day and possible criminal proceedings under Section 38.