Competition Commission of Pakistan approves fuel supply agreement exemption

The Competition Commission of Pakistan (CCP) has recently approved a time-limited exemption for specific clauses in the product supply agreement between ATC Fujairah FZE Ltd and GO Petroleum, allowing the import and sale of gasoline and diesel products in Pakistan. ATC Fujairah, a prominent UAE-based company in the energy and chemicals sector, has partnered with GO Petroleum, a leading Pakistani Oil Marketing Company with a widespread network of retail outlets.

Under this agreement, ATC Fujairah will supply gasoline and diesel to meet the demand of GO Petroleum, with the aim of achieving cost efficiencies and potentially offering competitive prices to Pakistani consumers. The exemption granted by CCP primarily focuses on exclusivity clauses, ensuring that all imported products are directed to GO Petroleum's outlets.

CCP's decision to grant this exemption is driven by the anticipated benefits for consumers, such as improved distribution networks and increased market competition. The Commission has also requested detailed information regarding regulatory approvals for fuel stations, terminals, and storage facilities. This exemption, sanctioned under the Competition Act of 2010, is designed to foster economic development, safeguard consumer interests, and prevent anti-competitive practices.

The exemption is subject to certain conditions, mandating both parties to abstain from anti-competitive conduct and excluding approval for pricing terms. Any off-specification products specified in the agreement must receive regulatory clearance before being imported and sold. Furthermore, approvals for terminals and storage facilities must be obtained from the relevant authorities.

This exemption is valid until June 2026, with the potential for extension contingent upon the applicants demonstrating the agreement's benefits in terms of enhanced distribution networks, increased competition, and economic advantages for consumers.

The Competition Commission of Pakistan's decision to grant an exemption for the fuel supply agreement between ATC Fujairah FZE Ltd and GO Petroleum signifies a step towards promoting fair competition, consumer welfare, and economic progress in the petroleum sector. By facilitating improved distribution networks and encouraging market competition, this exemption aims to benefit Pakistani consumers by potentially offering better prices and ensuring a steady supply of gasoline and diesel products.