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Watchdog raids gas firms over deposits

| Supplier news

The Competition Commission raided the offices of five liquefied petroleum gas (LPG) companies and the Liquefied Petroleum Gas Safety Association of Southern Africa seeking information on the deposit charged for gas cylinders.

The five companies are African Oxygen (Afrox), Oryx Oil SA, Easigas, KayaGas and Totalgaz.

Asked why the commission had chosen a dawn raid rather than a simple request for documentation, external communication co-ordinator Themba Mathebula said only that search and seizure was one of the many investigative tools available to the commission.

The commission said it was seeking documents and electronic data related to the alleged fixing of the deposit price, "which will be analysed together with other information gathered to determine whether a contravention of the Competition Act has taken place".

It urged anyone with information to come forward.

The refundable deposit consumers pay for a 9kg cylinder or larger is R300. The commission declined to comment on how the price was calculated or the differences between the deposits charged by the various firms.

Kevin Robertson, a spokesman for the Liquefied Petroleum Gas Safety Association of Southern Africa, said the commission’s inspectors were still at the premises at midday and the association was co-operating with them. The association is a nonprofit organisation that focuses on consumer safety.

Totalgaz said its company policy was not to speak to the media. It could only say it was co-operating with the commission.

Afrox head of LPG Mark Radford could not be reached.

The pricing of LPG cylinders is a separate issue from the market inquiry the commission launched a year ago, with a planned completion date of next March.

The inquiry covers, among other things, whether supply bottlenecks distort competition, the effect on competition of the regulatory pricing framework and the competition dynamics at various levels of the value chain.

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