CCI for probe into OMC cartel charges

Written by Ronojoy Banerjee | Ronojoy Banerjee | New Delhi | Updated: Jul 22 2010, 07:07am hrs
The Competition Commission of India has ordered an investigation into the alleged anti-competitive agreement entered into by leading oil marketing companies like Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation over supply of aviation turbine fuel (ATF) to the national carrier Air India. The investigation order dated July 20 was reached after a high-level meeting in the commission on Tuesday.

Last week Mukesh Ambani-led Reliance Industries Ltd had approached the commission alleging that the OMCs had formed a cartel to supply ATF to Air India. According to a senior CCI official the commission had found prima-facie evidence of anti-competition and had duly directed its director general office for investigation to look into the matter.

Under sections 3 and 4 of the Competition Act, 2002, the commission has ordered an investigation into the complaint filed by RIL. This is the first time a complaint of this nature has come to us, the official said. He said that no time line for the investigations have been fixed. The investigation office of the commission usually takes anywhere from 5-6 months to complete the submit the investigation report.

RIL that is reportedly looking to enter the aviation fuel supply had complained to CCI last week that the current market dynamics were heavily skewed in favour of the big oil companies led by IOC, HPCL and BPCL. RIL has argued how the market restricts the entry of private players....we are now going to look into it, the CCI source said. As per the current practise National Aviation Company of India (Nacil) floats tender for the supply of ATF fuel.

In just a short tenure since the commission was notified, it has had its share of high-power cases. The commission is expected to pass the final verdicts in at least 4-5 cases including the widely awaited case relating to Vijay Mallayas Kingfisher Airlines and Naresh Goyal led Jet Airways allegged anti-competitive Code Sharing Agreement.