The Competition Commission of Pakistan (CCP) has imposed a PKR 60 million penalty on the All Pakistan Edible Oil Tanker Owners Association (APEOTOA).
The penalty follows findings that the association fixed transportation charges and divided business among tanker owners. The Commission imposed PKR 30 million separately for price fixing and market allocation.
How the CCP Case Began
The case emerged from CCP market surveillance, which detected circulars fixing transportation charges for edible oil, ghee and fats.
These charges applied to transportation from Karachi ports to destinations across Pakistan. Consequently, the CCP launched a suo motu enquiry in August 2024.
The Commission later conducted a search and inspection in February 2025. Material recovered during the operation became part of the enquiry.
The investigation found that APEOTOA revised transportation rates 89 times between 2019 and 2025. These revisions included 52 increases and 37 decreases.
Meanwhile, corresponding circulars from the Pakistan Vanaspati Manufacturers Association (PVMA) communicated matching rate changes.
APEOTOA representatives also acknowledged that the two associations reached an agreement to set transport rates.
CCP Rejects Association’s Defence
APEOTOA argued that its rate circulars were only advisory in nature. However, the Commission rejected this position.
The CCP held that even non-binding recommendations from a trade association can restrict competition. Such recommendations may influence members’ independent commercial decisions.
The Commission also relied on the Supreme Court’s judgment in the PVMA case. That judgment affirmed that competitors must remain free to determine their prices independently.
Queue System Also Comes Under Fire
The Commission separately examined APEOTOA’s queue system for allocating consignments among tanker owners.
According to the findings, the system prevented tanker owners from independently competing for available business. Instead, the association issued parchis for lifting consignments and enforced compliance with the allocation system.
Furthermore, an APEOTOA circular issued in September 2023 prescribed a PKR 500,000 fine. The penalty applied separately to a tanker and its owner for violating specified allocation conditions.
The CCP therefore found that the queue system had the effect of dividing business among tanker owners.
CCP Considers Duration and Market Position
The Commission identified the relevant market as road transportation services for edible oil, ghee and fats across Pakistan.
While determining the penalty, the CCP considered several factors. These included APEOTOA’s substantial market position and the nearly six-year duration of the pricing conduct.
The Commission also considered senior management involvement in the conduct. Additionally, it noted that rate revisions continued even after enforcement proceedings had started.
Together, these factors formed part of the Commission’s assessment when imposing the PKR 60 million penalty.
Association Ordered to End Anti-Competitive Practices
Alongside the financial penalty, the CCP has directed APEOTOA to immediately stop the anti-competitive practices.
The association must also recall its existing price circulars and discontinue the queue system. This requirement specifically covers the system’s effect of dividing the market.
Moreover, APEOTOA must publish notices in two Urdu and two English national newspapers. The notices must clarify that tanker owners can independently determine transportation rates.
They must also state that tanker owners can lift consignments regardless of their membership in the association.
60-Day Compliance Deadline
APEOTOA must deposit the penalty and report compliance within 60 days.
Failure to comply could result in an additional penalty of PKR 50,000 per day. It may also lead to criminal proceedings under Section 38.
The CCP’s action therefore covers both the alleged fixing of transportation charges and the allocation of business through the association’s queue system. The association has been directed to end these practices and restore independent decision-making among tanker owners.
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