CCI to investigate bio-diesel pricing
30th December, 2011
The Competition Commission of India (CCI) has decided to launch a suo motu investigation on whether the petroleum ministry and state-run oil marketing companies (OMCs) had colluded to depress prices paid to bio-diesel companies. Bio-diesel companies cannot sell their products in open market and have to sell it to the OMCs at prices fixed by them.
Earlier, the Director General of Investigation and Registration (DGIR) had submitted a report that there was no significant finding of anti-competitive elements. However, the CCI seeks to examine if anti-competitive elements like unfair pricing or restricting market access have led to gross under-utilisation of capacity of bio-diesel plants and hindered their development. The bio-diesel industry has made repeated representations for fairness and clarity in laws.
The Competition Commission has overruled the DGIR on earlier occasions, notably in prepayment penalty charged by banks on foreclosure wherein the DGIR had found anti-competitive elements. Last December, the CCI had proceeded suo motu in investigating if the steep hike in airfares was due to cartel-like behaviour.