2/3/2015 | Governance and society

Galp Energia notified of €9.2 m fine from the Portuguese Competition Authority concerning the LPG business

Galp Energia informs that it has been notified of a decision from the Portuguese Competition Authority for the payment of a fine concerning an alleged practice restrictive to competition as a result of restrictions to inbound sales by bottled gas (LPG) distributors, an activity included in its Refining & Marketing (R&M) business.

Galp Energia informs that it has been notified of a decision from the Portuguese Competition Authority for the payment of a fine concerning an alleged practice restrictive to competition as a result of restrictions to inbound sales by bottled gas (LPG) distributors, an activity included in its Refining & Marketing (R&M) business.

For more than 50 years, Galp Energia has been marketing bottled gas in Portugal through a network of around 250 distributors, ensuring the supply of this energy product to all regions of the country.

Supply contracts with distributors include exclusivity of sales within a given geographical area, to ensure the efficient coverage of the whole national territory, particularly in sparsely populated and remote areas of the country. In addition, a limited number of supply contracts included a restriction to inbound sales (i.e. sales pursuant to customers’ request) outside the geographical area of the distributor. However, this restriction has not been applied by the Company for 15 years.

The decision notified today imposes a fine in matters of competition worth a total of €9.2 m, whereby the Portuguese Competition Authority has ruled on the illegality of the aforementioned restriction since 2000.

Galp Energia hereby clarifies that, as results from the decision of the Portuguese Competition Authority itself, said restriction did not affect the price of bottled gas nor has had any other negative impact to Galp Energia’s customers, neither has the Company or its distributors obtained any benefit from this practice.

Galp Energia regrets the decision from the Portuguese Competition Authority, which is unjustified given the evidence presented in the case, and has been based on purely formal grounds. Galp Energia hereby reinstates to the general public and, in particular, to its clients, that the Company operates in open and liberalised markets, along with other large foreign multinationals, in full compliance with competition rules. Galp Energia is currently carrying out a detailed analysis of the Portuguese Competition Authority’s decision to exercise, in a timely manner, its right to lawfully challenge such decision.

Source: Galp Energia, SGPS, S.A.