Competition Commission of India on Monday ordered closure of case filed by the Gujarat Government against BG group subsidiary, Gujarat Gas Company Ltd (GGCL), accusing it of arbitrarily hiking CNG prices in Surat.
"The commission, prima facie, is of the opinion that the conduct of GGCL is not abusive in terms of the provisions of the Act. There is no prima facie case made out for referring it to investigation," CCI stated in the order on Monday.
Since Petroleum and Natural Gas Regulatory Board Act is a special legislation for regulating the price mechanism and to ensure fair trade and competition among the entities, the Competition Act cannot be invoked complaining of increase in price, etc, the order said.
The commission on Monday passed the order after conducting hearing in two separate cases: one filed by the Gujarat Government and the other by the Gujarat Textile Processors Association (GTPA).
Both the complaints essentially alleged that GGCL had abused its dominant position by creating artificial scarcity of natural gas and increasing prices by 25 per cent during 2010-11 to reap windfall gains.
GGCL, a city gas distribution (CGD) company in Gujarat, supplies natural gas to domestic consumers, commercial establishments and industry in Surat, Bharuch and Ankleshwar. The company has a gas pipeline network of around 3,200 km.
The Gujarat Government had moved CCI against GGCL in November last year, saying it had received a lot of complaints against the company, regarding its price hike.
In June 2008, GGCL had raised the prices of natural gas from Rs 27.50 per kg to 39.75 per kg, according to the government.
The CCI order observed that operating margins of Indraprastha Gas Limited, a peer company operating in Delhi, were higher than that of GGCL.
Gujarat government was of the view that the case should be probed as the price hike was not driven by market forces and the company had hiked the prices as it was enjoying a monopoly.
Gujarat Textile Processors Association had also moved Competition Commission saying GGCL had arbitrarily hiked the gas prices though it was sourcing it cheap.
GGCL currently distributes around 3.5 million metric standard cubic meters per day (mmscmd) of natural gas to nearly 3.30 lakh customers.
"The commission, prima facie, is of the opinion that the conduct of GGCL is not abusive in terms of the provisions of the Act. There is no prima facie case made out for referring it to investigation," CCI stated in the order on Monday.
Since Petroleum and Natural Gas Regulatory Board Act is a special legislation for regulating the price mechanism and to ensure fair trade and competition among the entities, the Competition Act cannot be invoked complaining of increase in price, etc, the order said.
The commission on Monday passed the order after conducting hearing in two separate cases: one filed by the Gujarat Government and the other by the Gujarat Textile Processors Association (GTPA).
Both the complaints essentially alleged that GGCL had abused its dominant position by creating artificial scarcity of natural gas and increasing prices by 25 per cent during 2010-11 to reap windfall gains.
GGCL, a city gas distribution (CGD) company in Gujarat, supplies natural gas to domestic consumers, commercial establishments and industry in Surat, Bharuch and Ankleshwar. The company has a gas pipeline network of around 3,200 km.
The Gujarat Government had moved CCI against GGCL in November last year, saying it had received a lot of complaints against the company, regarding its price hike.
In June 2008, GGCL had raised the prices of natural gas from Rs 27.50 per kg to 39.75 per kg, according to the government.
The CCI order observed that operating margins of Indraprastha Gas Limited, a peer company operating in Delhi, were higher than that of GGCL.
Gujarat government was of the view that the case should be probed as the price hike was not driven by market forces and the company had hiked the prices as it was enjoying a monopoly.
Gujarat Textile Processors Association had also moved Competition Commission saying GGCL had arbitrarily hiked the gas prices though it was sourcing it cheap.
GGCL currently distributes around 3.5 million metric standard cubic meters per day (mmscmd) of natural gas to nearly 3.30 lakh customers.
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