Sasol to dig deep to pay R534m competition fine

2014-06-08 15:00

It is nowhere near the R1.46?billion levied on the construction cartel, but Sasol will still have to dig deep to pay a R534?million fine imposed on it by the competition tribunal.

The fine was for subsidiary Sasol Chemical Industries (SCI), which was found to have overcharged for purified propylene and polypropylene, which is used to make plastic products, between January 2004 and December 2007.

The amount it charged its only external customer and competitor for purified propylene, Safripol, inhibited the Safripol’s ability to compete with SCI, the tribunal found.

The fine was welcomed by the Manufacturing Circle, which said the ruling was “in favour of the productive side of the economy and will benefit downstream competition in plastics”.

It also pointed to another area – the pricing of natural piped gas – “in which the regulatory framework is too soft to ensure Sasol offers cost-reflective prices in an area where it has a monopoly”.

Safripol, an SME that also manufactures and supplies polypropylene and polyethylene, brought Sasol’s anticompetitive behaviour to the attention of the competition commission.

According to the judgment handed down by the tribunal, prices charged by SCI had a significant adverse effect on the local plastic converters and caused them harm during January 2004 and December 2007.

Competition commissioner Thembinkosi Bonakele called the outcome a “watershed moment in the fight against exploitation”.

The commission would work on a pricing remedy to ensure that barriers in the plastic market were reduced to foster a competitive environment, he said.

Safripol public affairs director Ian Kennon said the company was pleased with the verdict. “Our first reaction is that?...?Safripol will be better placed to continue being a supplier of choice for many sectors of the polypropylene business.”

Instead of imposing an administrative penalty only, the tribunal opted for a reduced monetary penalty but forced a method of determining SCI’s future pricing of both inputs that would see the prices charged by SCI to local customers drop.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24


Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.