CCP grants petroleum agreement exemption

The Competition Commission of Pakistan (CCP) has granted a time-bound exemption on the relevant clauses of the product supply agreement between Aramco Trading (ATC) Fujairah FZE Ltd and Gas & Oil Pakistan Ltd (GO Petroleum) for importing and selling gasoline and diesel products to Pakistan.

ATC Fujairah, registered in the United Arab Emirates, is one of the world’s largest integrated energy and chemicals companies. Gas & Oil Pakistan Ltd, an Oil Marketing Company (OMC) registered in Pakistan, operates a network of retail outlets nationwide selling petrol, diesel, and lubricants.

Under the agreement, ATC Fujairah intends to meet GO Petroleum’s demand for essential petroleum products, primarily gasoline and diesel, for its outlets. The parties have informed the CCP that this arrangement aims to achieve economies of scale in procurement for GO Petroleum, potentially resulting in better prices for Pakistani consumers. The exemption sought pertains to the exclusivity aspects of the commercial agreement, supplying 100% of the imported products for GO Petroleum’s retail outlets.

In considering the matter, the CCP requested information on how the arrangement would enhance the distribution network and translate into benefits for consumers. Additionally, the status of approvals from relevant regulators on fuel stations, fuel terminals, and storage depots was sought. The CCP also evaluated how synergy between GO Petroleum and ATC Fujairah would benefit the economy and consumers, while enhancing competition in the relevant market.

Exemptions are granted by the CCP pursuant to Section 9 of the Competition Act, 2010, ensuring that such exemptions carry economic benefits outweighing anti-competitive effects. This promotes economic progress for consumer welfare and enhances production and distribution.

Published in The Express Tribune, May 22^nd, 2024.

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