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Johannesburg - South Africa's competition watchdog on Thursday proposed to fine petrochemicals group Sasol [JSE:SOL] 10% of its turnover for charging excessive prices for polypropylene and propylene.
Polypropylene is a plastic polymer.
The Competition Commission said it had referred complaints of collusion and excessive pricing by Sasol's subsidiary Sasol Chemicals Industries and plastics manufacturer Safripol to a tribunal for final adjudication.
"The commission found that Sasol had charged excessive prices for polypropylene and propylene to its local customers in line with import parity pricing," the watchdog said in a statement.
"The commission is seeking a penalty of 10% of Sasol's annual turnover for each of these contraventions."
Sasol had a turnover of R137.8bn in 2009.
The commission said Sasol had abused its position as a dominant supplier of propylene and polypropylene and a major exporter of polypropylene.
"One would therefore have expected pricing to local customers to be on the same basis as export prices; however, this is not the case," it said.
The watchdog said it had reached a settlement with Safripol after the company admitted that the supply agreement between Sasol and Safripol and its implementation amounted to price fixing.
Safripol had agreed to pay a R16.5 million penalty, which represents 1.5% of its total annual turnover derived from polypropylene products.
- Reuters
