CCP Grants Time-Bound Exemption for Aramco Trading & GO Petroleum Agreement

Islamabad, Pakistan – The Competition Commission of Pakistan (CCP) has granted a time-bound exemption on specific clauses of the product supply agreement between Aramco Trading (ATC) Fujairah FZE Ltd and Gas & Oil Pakistan Ltd (GO Petroleum) for the import and sale of gasoline and diesel products in Pakistan. This announcement was made in a statement released on Tuesday.

ATC Fujairah, an integrated energy and chemicals company registered in the United Arab Emirates, has entered into an agreement with GO Petroleum, a Pakistani oil marketing company that operates a network of retail outlets selling petrol, diesel, and lubricants across the country.

Under this agreement, ATC Fujairah will supply GO Petroleum with the necessary petroleum products, primarily gasoline and diesel, to meet the demand at its outlets. The parties have submitted to the CCP that this arrangement is expected to achieve economies of scale in procurement for GO Petroleum, potentially resulting in better prices for Pakistani consumers.

The exemption sought pertains to the exclusivity aspects of the commercial agreement, allowing ATC Fujairah to supply 100% of GO Petroleum’s imported product demand.

In reviewing the matter, the CCP sought information on how the arrangement would enhance the distribution network and the resultant benefits for consumers. The CCP also examined the status of approvals from relevant regulators concerning fuel stations, fuel terminals, and storage depots. Additionally, the commission considered how the synergy between GO Petroleum and ATC Fujairah would benefit the economy and consumers, while also enhancing competition in the relevant market.

The CCP grants exemptions under Section 9 of the Competition Act, 2010, ensuring that such exemptions provide economic benefits that outweigh any anti-competitive effects, thereby promoting economic progress for the benefit of consumers and improving production and distribution.

“The CCP has accordingly granted an exemption on the product supply agreement with certain conditions included therein. The CCP’s conditions stipulate that both parties must refrain from engaging in anti-competitive activities. Importantly, the exemption does not include approval on any pricing terms and mechanisms related to the products,” the statement said.

Furthermore, the statement highlighted that the agreement references certain off-specification products, for which approval from the concerned sector regulator must be ensured for import and sales. The applicants are also directed to obtain required approvals for their terminals and storage facilities from relevant authorities for the execution of this agreement.

Subject to these conditions, the CCP has granted the exemption until June 2026. If an extension of the exemption is required, the applicants may approach the commission with the necessary details and evidence of the benefits accrued from the improved distribution network of petroleum products and enhanced competition in the relevant market, as per the statement.