Energy company, competition commission settle depute

The Namibian Competition Commission (NaCC) reached a settlement agreement with Puma Energy regarding allegations of anti-competitive practices in the aviation fuel market.

The settlement agreement reached on 22 February stipulates a N$4 million settlement fee from Puma.

According to a notice published in the Government Gazzette of 8 March, the NaCC initiated two investigations into Puma’s conduct, with the first investigation launched in September 2016.

This came after complaints where lodged by the Aircraft Owners and Pilots Association of Namibia (Aopa).

“We alleged that Puma, as a dominant player, was exploiting its position by charging excessively high prices for aviation fuel at Eros and Ondangwa airports,” states the notice.

The second investigation started in September 2020 and focused on potential price discrimination by Puma at the Eros, Ondangwa and Hosea Kutako International airports.

Price discrimination occurs when a company charges different prices for the same product or service to different customers without a legitimate justification.

According the gazette, the settlement agreement, while resolving the investigations, does not require Puma to admit liability.

However, it outlines several key measures the company must undertake.

“Puma will pay a N$4-million settlement fee. This amount is broken down into two parts – a N$3-million penalty for the alleged breaches and an additional N$1-million to partially cover the NaCC’s investigation costs,” the notice states.

Additionally, Puma is obligated to develop and implement a comprehensive competition law compliance programme for its employees and management.

“This programme will educate staff on competition law principles and best practices to ensure adherence in their daily operations,” the notice reads.

Puma will also have to provide the NaCC with a summary of the settlement agreement, clearly outlining the terms for its management team.

“This transparency aims to raise awareness within the company of competition law and potential pitfalls,” says Vitalis Ndalikokule, the NaCC’s chief executive.

Moreover, Puma is required to conduct a review of its internal policies and practices to identify and rectify any areas potentially conflicting with competition law.

“This collaborative approach allows Puma to gain clarity on specific competition law issues and implement best practices to avoid future concerns,” Ndalikokule says.

Puma has committed to implementing a zero-tolerance policy on any anti-competitive behaviour by its staff.

This signifies the company’s dedication to fair competition within the market.

The N$4-million penalty paid by Puma will be deposited into Namibia’s State Revenue Fund.

“The NaCC’s vigilance in investigating and addressing such concerns helps to create a level playing field for all participants in the market, ultimately benefiting Namibian consumers,” Ndalikokule says.

According to the notice, while the settlement resolves the secific allegations against Puma, it is important to note that the NaCC remains vigilant in monitoring the aviation fuel market.

The commission will continue to investigate any future concerns raised and take appropriate action to safeguard fair competition for the benefit of Namibian consumers and the aviation industry.