THEE - The Competition Commission - Two major oil companies settle bitumen

THEE - The Competition Commission - Two major oil companies settle bitumen      
cartel case                                                                     
The Competition Commission                                                      
MEDIA RELEASE                                                                   
21 February 2012                                                                
Two major oil companies settle bitumen cartel case                              
The Commission has reached settlement agreements with two major oil             
companies, namely Engen Petroleum Limited (Engen) and Shell South Africa        
Marketing (Pty) Limited (Shell) in which they admit to having fixed the         
price of bitumen with other oil companies by collectively determining and       
agreeing on pricing principles, including a starting reference price and        
monthly price adjustment mechanism.  Engen has agreed to pay a penalty of       
R28 800 000 and Shell has agreed to pay R 26 259 480.                           
These settlement agreements follow the Commission`s referral on 04 March        
2010 of its findings against the Southern Africa Bitumen Association            
(SABITA) and seven major oil companies namely, Chevron SA (Pty) Ltd, Engen,     
Shell, Total SA (PTY) Ltd, Masana Petroleum Solutions (Pty) Ltd, Sasol          
Limited and Tosas (Pty) Ltd to the Tribunal for adjudication. The               
Commission did not seek a penalty from Sasol and its subsidiary, Tosas,         
which were granted conditional immunity following the leniency application      
filed with the Commission by Sasol on 12 January 2009. Subsequent to the        
referral, the Commission previously concluded settlement agreements with        
Masana and SABITA in 2010 and 2011, respectively.                               
Bitumen is one of the by-products from crude oil refining. Bitumen and          
modified bitumen products are used to surface and rehabilitate roads, as        
waterproofing products and to suppress dust. The end customer of bitumen is     
mainly government road agencies and municipalities.                             
This case was initiated following information received from Sasol and its       
subsidiary Tosas in the leniency application. In its investigation the          
Commission found that the oil companies entered into an agreement and           
engaged in collusive conduct from around 2000 until at least December 2009.     
The conduct included the exchange of competitively sensitive information        
relating to the pricing of bitumen and associated products, and the use of      
an agreed pricing formula to set the wholesale list selling price of            
bitumen. This was facilitated through meetings convened by the industry         
association, SABITA, as well as correspondence through SABITA and direct        
communication between oil companies.                                            
The Commission has filed these agreements with the Tribunal and awaits set      
down for confirmation as orders of the Tribunal.                                
ENDS                                                                            
For more information:                                                           
Molebogeng Taunyane, External Communication Coordinator                         
012 394 3289/082 646 8663 / molebogengt@compcom.co.za                           
Date: 21/02/2012 10:06:47 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department.                  
The SENS service is an information dissemination service administered by the    
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or            
implicitly, represent, warrant or in any way guarantee the truth, accuracy or   
completeness of the information published on SENS. The JSE, their officers,     
employees and agents accept no liability for (or in respect of) any direct,     
indirect, incidental or consequential loss or damage of any kind or nature,     
howsoever arising, from the use of SENS or the use of, or reliance on,          
information disseminated through SENS.