Gas supply cartel under fire


Litigation has begun against major gas companies for not supplying forklift gas (LPG) cylinders to each other’s customers

Gas supply cartel under fire
Gas supply cartel under fire
August 24, 2012

Legal action has begun against two major gas companies accused of arranging an anti-competitive cartel, which allegedly declined to supply gas (LPG) cylinders to each other’s customers in a bid to keep prices high.

The Australian Competition and Consumer Commission (ACCC) yesterday announced it had begun proceedings in the Federal Court in Sydney against Renegade Gas Pty Ltd (trading as Supagas NSW, a privately owned company) and Speed-E-Gas (NSW) Pty Ltd (a wholly owned subsidiary of Origin Energy Limited).

The ACCC alleges that these companies, through their senior executives and sales staff, engaged in the cartel arrangement in the Sydney basin between 2006 and 2011, in contravention of the Competition and Consumer Act (and formerly the Trade Practices Act).

The ACCC says customers that were deceived came from small and large scale businesses using LPG cylinders to power forklifts and transport goods.

The ACCC alleges that the anti-competitive cartel arrangement included not approaching customers of the other competitor and offering to supply forklift gas to customers of the other competitor at a price that they knew was not likely to induce the customer to change suppliers.

"This alleged conduct may have resulted in forklift gas customers of Renegade Gas and Speed-E-Gas not being able to obtain a more competitive price from the other supplier, and therefore paying a higher price than they may otherwise had to pay," a statement from the ACCC says.

"Such higher cost to these businesses may have been passed on to consumers through higher prices that consumers pay for goods supplied by these businesses."

The ACCC is seeking declarations, injunctions, pecuniary penalties and costs against Renegade Gas and Speed-E-Gas, and the implementation of a trade practices compliance program by Renegade Gas.

The ACCC also alleges that current and former senior executives of both Renegade Gas and Speed-E-Gas implemented the alleged cartel arrangement between Renegade Gas and Speed-E-Gas.

The ACCC is seeking declarations, injunctions, banning orders, pecuniary penalties and costs against these senior executives.

A directions hearing is listed for the Federal Court in Sydney on September 20.

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