The Competition Commission of India (CCI) today imposed a penalty of Rs 165.58 crore on 48 LPG cylinder makers for forming a cartel while bidding during the tenders floated by Indian Oil in 2010-11.
The competition watchdog imposed the penalty after finding them guilty of manipulating the bids and quoting "identical rates in groups through an understanding and collusion action".
The ruling was based on the findings of the CCI's Director General (Investigations).
"Considering the totality of facts and circumstances of the present case and the seriousness of the contravention, the Commission decides to impose a penalty on each of the contravening company at the rate of 7 per cent of the average turnover of the company," CCI said in its order.
At present, only 37 large players out of 48 entities control the supply and act as a cohesive group making it difficult for new players to enter the market, CCI said.
Moreover, it added, "...Supply at higher prices would definitely impact the Indian Oil Corporation Ltd and end consumers adversely."
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The CCI took cognizance of the case following submission of an investigation report by the Director General in a case relating to gas cylinder supply on a complaint by the Indian Oil.
"In that case it was reported by the DG that in a tender floated by IOC for the supply of 105 lakh 14.2 KG capacity LPG cylinders with SC valves, the manufacturers of LPG cylinders had manipulated the bids and quoted identical rates in groups through an understanding and collusion action," it said.
Indian Oil invites bids for empty LPG cylinders from private players. Then cylinders are filled at the company's facilities and dispatched for retailing.