Mexico Watchdog Sees Potential LPG Antitrust Violations

Mexican competition watchdog COFECE has identified a company that could have incurred in anti-trust practices in the liquified petroleum gas (LPG) market.

The regulator notified an unspecified player it would start an inquiry into whether the firm had incurred in price discrimination, namely charging different prices for the same product to different customers. The firm participates in the import, distribution and sale of LPG, Cofece said in a release.

If it is found to be in breach, the company could be charged a penalty equal to up to 8% of its revenue.The firm concerned can respond to the accusation and submit evidence to the watchdog in order to defend its practices, which may be upheld through various justifications, including efficiency gains, or other benefits to end consumers. The agency’s plenary will then issue a ruling, in a process that as been known to drag out for several months.

Read More: Mexico’s COFECE Takes On Government Over Energy Policy

Last year, COFECE issued a report stating the country’s LPG market lacked appropriate competition conditions and could require additional regulations. It also accused several companies of forming an oligopoly aimed at divvying up the market to avoid competing with each other.

Earlier this year, Cofece engaged in an industry debate regarding changes proposed by the energy ministry and natural gas grid control center Cenace that would force private players to contract natural gas from state-owned companies to access transport capacity in national gas system Sistrangas.

Cofece said the measure would “compromise non-discriminatory open access to the system … artificially strengthening the position of the state-owned firms and sidelining private gas sellers.”

Watch: CPI TV Ten Minutes With COFECE President Alejandra Palacios

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