Sasol Chemical Industries Limited v The Competition Commission

The Competition Commission referred complaints to the Competition Tribunal alleging that Sasol Chemical Industries Limited (SCI), a dominant firm, charged excessive prices in contravention of section 8(a) of the Competition Act 89 of 1998. The complaints concerned prices charged between 2004 and 2007 for purified propylene sold to Safripol and polypropylene (PP) sold to domestic customers. SCI was the only significant producer of purified propylene in South Africa and held between 64% and 80% of the PP market, and over 90% of the propylene market. SCI derived its domestic PP prices from import parity pricing (IPP), which were significantly higher than its export prices. The Commission argued that SCI’s low feedstock costs (due to its relationship with Sasol Synfuels and a favourable fuel alternative value (FAV)) were not passed on to customers, resulting in prices bearing no reasonable relation to economic value and causing consumer detriment. The Tribunal upheld the complaints and imposed substantial administrative penalties. SCI appealed to the Competition Appeal Court.

The final outcome and order of the Competition Appeal Court cannot be determined from the provided judgment text, as the extract ends before the Court’s conclusions and operative order are set out.

This case is significant for its detailed engagement with the concept of excessive pricing under section 8(a) of the Competition Act and the difficulties of translating economic concepts into enforceable legal standards. It illustrates the tension between cost-based analyses, import parity pricing, and the notion of economic value, as well as the relevance of unique historical or structural advantages enjoyed by dominant firms. The case forms part of the evolving South African jurisprudence on excessive pricing and the limits of competition law intervention in pricing conduct.