SCPEC of Armenia imposes AMD 100mln fine on city petrol group

YEREVAN, March 14. /ARKA/. The State Commission for Protection of Economic Competition (SCPEC) imposed Wednesday a 100 –million-dram penalty on «City Petrol Group» (CPS) company for an abuse of dominant position on the Armenian gasoline market.

«City Petrol Group» company holds dominating 41.7% of gasoline market and 40.8% that of diesel fuel.

The investigation, carried out by Antimonopoly commission of Armenia, on the Armenian gasoline market in September-October of 2011 exposed the facts of CPS’s unfair pricing policy that pushed the owners of small gas-stations in the regions to bankrupt and sell their business to «City Petrol Group» under unfavorable conditions, according to Arman Manasaryan, SCPEC chief assistant.

“Thus, many companies have to buy fuel fr om CPS, as it is a major supplier of gasoline and diesel fuel. We found out that to buy the fuel at CPS distribution centers costs the same as to get it in the company’s gas-stations. As a result small household actors, who buy gasoline and diesel fuel from CPS are in a very difficult situation, as they are unable to sell gasoline at higher prices than those offered by the company’s gas-stations,” Manasaryan said. 

He said that within this period (September-October 2011) the fuel price at «City Petrol Group» company’s distribution centers was 406-415 drams (Yerevan) and 404-415 drams (regions) per liter, wh ereas at its gas-stations- 440 drams (Yerevan) and 420 drams (regions) per liter.

“As you see, the household actors in the regions bought the fuel for 415 drams per liter and had to sell it for 420 drams. Certainly, these 5 drams didn’t cover their expenses, and the companies busted,” he clarified adding that private entrepreneurs of the regions are often deprived of an opportunity to buy the fuel from other suppliers, as only CPS owns distribution centers in most of Armenian regions. 

Manasaryan also said that the same investigation revealed dozens of cases when small gas-station owners were forced to sell their business to CPS or sign an agreement on joint exploitation under humiliating conditions: CPS got 98% of profit and an owner -just 2%. 

“By exploiting business, that was founded by someone else, CPS got a lion’s share. Only in Vanadzor, CPS has 8 gas-stations, 7 of which were obtained in this way,” he said. 

«City Petrol Group» company tried to explain the situation, however failed to justify its behavior. 

SCPEC representatives were absent at today’s session.

Manasaryan also said the investigation was carried out throughout the territory of Armenia, and other suppliers such as Flash, Mika, Maxhur were also checked. However, no such violations were found there. Artak Shaboyan, a head of Antimonopoly Commission, instructed to check within 3 days whether «City Petrol Group» has corrected its violations.--0--