ISLAMABAD: The Competition Commission of Pakistan has fined the All Pakistan Edible Oil Tankers Owners Association Rs60 million for collectively fixing transportation rates for edible oil and ghee and allocating business among tanker operators.
The CCP said the association was fined Rs30 million for collective determination of transport rates and another Rs30 million for allocating business through a token and rotation system.
According to the commission, the association had agreed to increase transport rates by 0.75% whenever diesel prices rose by Rs1, while reducing rates by only 0.5% when diesel prices fell by Rs1.
The CCP said transport rates were collectively revised 89 times over six years, including 52 increases and 37 decreases. Tanker owners offering discounted rates were allegedly threatened with blacklisting, while mills seeking lower rates were threatened with suspension of edible oil supplies.
The commission said tankers were allocated business through a token and rotation system rather than through free competition. A penalty of Rs500,000 was prescribed separately for each tanker and its owner for violating certain conditions.
Despite a show-cause notice, the association issued a new rate circular in August 2026 covering transportation to 81 locations, the CCP said. It warned that higher transportation costs could further increase the prices of essential commodities such as ghee and edible oil.
The CCP said about 2,362 tankers and 1,700 owners were registered with the association, while 250 to 300 association tankers visited ports daily. The association accounted for about 83% of the market when compared with the National Logistics Corporation’s 50 to 60 tankers, it added.
The commission said the association had an agreement with the Pakistan Vanaspati Manufacturers Association for determining transport rates. Representatives of the tanker association acknowledged that rates were fixed through a mutual agreement.
The transport-rate agreement was initially reached in 2011 and updated in 2022, according to the CCP.
During a search, the commission seized six years of rate circulars, agreements and computer records. It said its earlier proceedings had also uncovered agreements between PVMA and oil tanker associations for fixing transport rates.
In that earlier case, the CCP had fined PVMA Rs50 million for violating Section 4 of the Competition Act by fixing prices.
The CCP has ordered the immediate termination of collective rate fixing and the token-and-rotation system.