Logo of GASCO
The General Authority for Competition (GAC) announced today, June 15 rejecting the request received from National Gas and Industrialization Co. (GASCO) to acquire a 55% stake in Best Gas Carrier Co., according to a statement.
GAC explained that GASCO is currently a monopoly of the gas supply chain in the stages of storage, filling, distribution and wholesale.
It added that if the deal was approved, the company would have, due to its dominant position, the ability and incentive in the high-potential impact on the distribution and retail supply chain, by excluding Best Gas Carrier’s competitors in the liquefied petroleum gas (LPG) distribution market. This would have included raising fees, reducing the quality of services and products provided, or preference in financial transactions.
Through its study and comparison of LPG supply chains in a large number of countries, GAC concluded that these countries are heading to liberalize the sector, open competition in the three supply chains, and limit or prevent vertical integration in this sector in order to strengthen competition and achieve the general welfare of consumers and optimal distribution of resources in the national economy. This goes is in line with the vision and direction of the Saudi Ministry of Energy.
After interviews and investigations with competitors of the Best Gas Carrier, GAC indicated it has great concerns about the consequences of completing the deal. It stressed its keenness to maintain competition in the markets and remove any relevant barriers.
The potential efficiencies from the deal, according to the viewpoint of the concentration parties, could be achieved without finalizing the deal, GAC stated. It added that the potential damage to competition would be greater than the desired benefit in the event of deal completion.
GASCO signed on Feb 15 a share purchase agreement with Mohammed bin Manahi bin Muneer Albuqami to acquire 55% ownership in Best Gas Carrier Co., according to data available with Argaam.
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