Business Companies 15 Jul 2017 CCI orders fresh pro ...

CCI orders fresh probe against GAIL

PTI
Published Jul 15, 2017, 3:44 am IST
Updated Jul 15, 2017, 3:44 am IST
This is the second time in less than one year that the firm has come under the lens of the watchdog for alleged unfair business practices.
It was alleged that GAIL abused its dominant position by incorporating unfair terms and conditions in the Gas Sale Agreement (GSA).
 It was alleged that GAIL abused its dominant position by incorporating unfair terms and conditions in the Gas Sale Agreement (GSA).

New Delhi: The Competition Commission on Friday ordered a fresh investigation against state-owned GAIL (India) for alleged abuse of dominant position with regard to supply of natural gas.

This is the second time in less than one year that the firm has come under the lens of the watchdog for alleged unfair business practices.

 

After finding prima-facie evidence of competition norms violations, the CCI has ordered the probe based on a complaint by Rajasthan-based TMT bars maker Shri Rathi Steel (Dakshin) Ltd.

It was alleged that GAIL abused its dominant position by incorporating unfair terms and conditions in the Gas Sale Agreement (GSA).

For this case, the regulator considered the market for supply and distribution of natural gas to industrial consumers at Alwar in Rajasthan as the relevant one.

Shri Rathi Steel had entered into a GSA pact with GAIL in March 2009. The watchdog said the conduct of GAIL in implementing such ToP (Take-or-Pay) liability from 2015 appears to be a modus to ensure de facto exclusivity of the contractual arrangement.

“This, besides prohibiting the buyers from shifting to alternatives or terminating the GSA in the event of closure of their business, also appears to create entry barriers for alternative suppliers to enter the market or build up a viable customer base,” it said in a order. 

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Location: India, Delhi, New Delhi




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