Gujarat Gas wins Competition Commission reprieve

Vol 15, PW 14 (26 Jan 12) People & Policy
     

Gujarat Gas and its outgoing UK-based owner British Gas received excellent news on January 17 when the fair-play watchdog Competition Commission of India (CCI) issued a three-page order in their favour dismissing charges of “abuse of monopoly and dominant position.

” The CCI order, dated December 20, was signed by assistant director SP Gahlaut in January, and rejected outright a 600-page complaint filed against Gujarat Gas on August 30 by the South Gujarat Textile Processors Association (SGTPA), a lobby group, and a similar complaint filed on August 10 by Gujarat’s energy department. “We have yet to receive the official letter from the CCI,” confirms Vishal Budhia, chairman of the SGTPA gas committee, which represents Surat cloth mills.

“But we will appeal against the decision!” Budhia’s organisation alleged that Gujarat Gas had “abused its dominant position” as the sole gas supplier for Surat, Bharuch and Ankleshwar, “by imposing unilateral, unreasonable and arbitrary conditions before supplying gas to customers and regularly hiking up prices.” In their petitions the cloth mills demanded an inquiry by the CCI director general into the operations of Gujarat Gas and parent BG under sections 3 and 4 of the Competition Act, 2002, for “reaping ‘windfall’ profits by inflating the price of gas and creating ‘artificial’ gas supply restrictions.

” But the CCI decided there are no grounds to prove Gujarat Gas ‘abused’ its position. “There is also no data to suggest the prices charged by Gujarat Gas are excessive, unfair or discriminatory,” reads the January 17 order.

“The margins of Indraprastha Gas are much higher than Gujarat Gas. This means Gujarat Gas is not charging an unfair price,” adds the order.