CCI rejects complaint against Great Eastern Energy Corp

NEW DELHI
25 Feb 2017

The Competition Commission has dismissed allegations of unfair business practices made against Great Eastern Energy Corporation Ltd (GEECL) with regard to supply of coal bed methane gas.
The complaint was filed by an employee of SRMB Srijan Ltd, which had a Gas Sale and Purchase Agreement (GSPA) with GEECL. Both entities are based in West Bengal.
Among others, it was alleged that GEECL had unreasonable terms and conditions in the agreement and charged discriminatory prices.
In May, 2011, SRMB had signed the pact with the company.
To assess whether there have been anti-competitive issues or not, the Competition Commission of India (CCI) considered 'market for supply of CBM to industrial customers in Asansol-Raniganj-Durgapur industrial area' as the relevant one.
Dismissing the complaint, the CCI said a uniform pricing may not be applicable due to different types of customers, quantity procured by them and transportation costs depending upon distance.
"Pricing is essentially a commercial decision based upon a variety of factors and the agreements which are themselves outcomes of negotiations of varying degree.
"Hence, lack of uniformity in itself cannot be a ground to hold discrimination unless the same is demonstrably shown to be a result of abuse treating similar set of customers differently," the regulator said in a recent order.
As per the CCI, GEECL was enjoying dominant position in the relevant market which enabled it to operate independently of competitive forces during the 2009-2012 period.
However, after taking into consideration various aspects, the watchdog said there is not contravention of Section 4 of the Competition Act by GEECL.
Section 4 pertains to abuse of dominant position.
Further, the CCI said pricing of CBM does not come under the administered price mechanism and the producer is free to sell the gas at market rates as per the Production Sharing Contract (PSC) of GEECL with the government. (PTI)