Rs60m penalty slapped on edible oil tanker owners

Competition authority blames association for price fixing, business allocation

ISLAMABAD:

The Competition Commission of Pakistan (CCP) has imposed a total penalty of Rs60 million 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, in violation of Section 4 of the Competition Act, 2010. The commission imposed Rs30 million each for price fixing and market allocation.

The case originated from the CCP's market surveillance, which detected circulars fixing transportation charges for edible oil, ghee and fats from Karachi ports to destinations across Pakistan. A suo motu enquiry was initiated in August 2024, followed by search and inspection in February 2025.

The probe established from the material impounded during the search that APEOTOA revised transportation rates 89 times between 2019 and 2025, comprising 52 increases and 37 decreases. Corresponding circulars issued by the Pakistan Vanaspati Manufacturers Association (PVMA) communicated matching rate changes, while APEOTOA representatives acknowledged that transport rates were set through an agreement between the two associations.

The commission rejected APEOTOA's claim that its rate circulars were merely advisory, holding that even non-binding recommendations by a trade association may restrict competition by influencing members' independent commercial decisions. It also relied on the Supreme Court's judgment in the PVMA case, affirming that competitors must remain free to determine their prices independently. The commission separately found that APEOTOA's queue system allocated consignments among tanker owners instead of allowing independent competition for business. The association issued slips (parchis) for lifting consignments and enforced compliance with the system.