ISLAMABAD: In a major development, the Competition Commission of Pakistan (CCP) has unearthed a cartel in the transportation of edible oil, ghee and fats, with potential implications for the prices of these essential commodities, imposing a Rs60 million penalty on the All Pakistan Edible Oil Tanker Owners Association (APEOTOA) for collectively fixing transportation charges and allocating business among tanker owners.
An order passed by the CCP bench comprising Chairman Farid Ahmad Tarar and Member Bushra Naz Malik imposed Rs30 million for price fixing and another Rs30 million for market allocation through a restrictive queue and parchi system, holding both practices in violation of Section 4 of the Competition Act, 2010.
The regulator’s detailed findings also revealed a long-running rate-setting arrangement between APEOTOA and the Pakistan Vanaspati Manufacturers Association (PVMA).
Separately, last month, the Supreme Court upheld the CCP’s finding that PVMA had violated Section 4 by collectively fixing prices of ghee and cooking oil, while directing the association to pay a penalty of Rs30 million.
According to details of the order available with Business Recorder, APEOTOA representatives acknowledged that transportation charges were determined under an agreement with PVMA. The arrangement was originally entered into in 2011 and updated in 2022.
Significantly, a PVMA circular referring to the arrangement provided that for every Re1 increase in diesel price, transportation charges would increase by 0.75 percent, while every Re1 decrease would result in only a 0.5 percent reduction.
Thus, for an equivalent movement in diesel price, the rate for increasing freight charges was 50 percent higher than the rate for reducing them.
The investigation also uncovered an October 3, 2025 circular threatening to blacklist tanker owners offering discounted rates to mills and stop supplies to mill owners seeking such discounts.
APEOTOA’s own figures showed around 2,362 registered vehicles belonging to approximately 1,700 owners, with 250-300 Association vehicles visiting ports daily. The Commission compared a minimum 250 APEOTOA vehicles with 50 NLC vehicles and calculated APEOTOA’s share at approximately 83 percent on that basis while assessing the seriousness of the infringement.
The CCP observed that edible oil, ghee and fats are essential commodities and that increases in their prices resulting from higher transportation costs would adversely affect consumers, particularly amid high inflation and poverty.
The order further revealed that the conduct continued despite enforcement proceedings. Even after issuance of a show-cause notice in December 2025, APEOTOA issued another circular on August 18, 2026, revising ghee transportation charges for 81 destinations outside Karachi.
The Commission treated the nearly six-year duration, senior management involvement and continuation of the conduct after enforcement proceedings commenced as aggravating factors in determining the penalty.
Copyright Business Recorder, 2026
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