CCI to probe Great Eastern Energy for unfair business practices

January 2, 2015

NEW DELHI – The Competition Commission has ordered an investigation against Great Eastern Energy Corp for allegedly indulging in unfair business practices with respect to sale of coal bed methane gas to entities in West Bengal.

Great Eastern Energy Corporation Ltd (GEECL) is engaged in exploration, development, production, distribution and sale of CBM gas.

The Commission has asked its investigation arm – Director General (DG) – to look into the case after prima facie finding the company in violation of competition norms.

On a careful perusal of the allegations and the terms of Gas Sale and Purchase Agreement (GSPA), the Competition Commission of India (CCI) said it is of the “prima facie” opinion that the “impugned terms appear to be tilted in favour of the seller and against the buyer”.

“Thus, prima facie the opposite party (Great Eastern Energy) appears to have contravened the provisions of section 4 of the (Competition) Act,” the regulator said in an order dated December 29.

The market for ‘the supply and distribution of natural gas to industrial consumers in Asansol-Raniganj-Durgapur region in West Bengal’ was prima facie considered as the relevant market by CCI.

It was alleged that GEECL, which is in dominant position in the relevant market of supply and distribution of CBM gas in Asansol-Raniganj-Durgapur belt, abused its position by imposing “unconscionable terms and conditions” in Gas Sale and Purchase Agreement (GSPA).

As per the complainant, GEECL imposed unfair conditions upon the CBM gas buyers besides charging unfair and discriminatory prices.

The investigation has been ordered following a complaint by an employee of SRMB Srijan, which is into steel rolling activities. The firm is a buyer of CBM gas from GEECL.

“It appears that GEECL was having 100 per cent market share during 2010-11, 88 per cent during 2011-12 and more than 70 per cent market share during 2012-13 in the relevant market and as such the consumers seem to depend upon it as the industrial units like SRMB have converted their plants to CBM gas use,” the order said. (The Economic Times)