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CADE’s General Superintendence investigates discriminatory conduct in the gas market

Anticompetitive Conduct

Comgás made the investigative request against Petrobras
published: Nov 12, 2015 05:22 PM last modified: Apr 11, 2016 06:03 PM

CADE’s General-Superintendence opened on 12 November 2015, an Administrative Proceeding in order to assess potential anticompetitive conduct in the service of gas supply by Petrobras. The alleged conduct of the state company would have the purpose of promoting its own distributors to the detriment of Companhia de Gás de São Paulo – Comgás (Administrative Proceeding No 08700.002600/2014-30). 

According to the complaint submitted to CADE by Comgás, the alleged discriminatory conduct perpetrated by Petrobras would have begun in 2011, when the state company started a discount program for natural gas prices. Petrobras has two types of contracts for natural gas supply: the first one is called Nova Política de Preços (NPP in its acronym in Portuguese) and it includes the national gas, the Bolivian gas and the gas imported through ships; the second one is the Transportation Capacity Quantity (TCQ), which is exclusively related to the Bolivian source. However, Petrobras only granted the discount benefit to NPP contracts. 

Comgás, which operates in the cities of São Paulo, Santos, Campinas and region, obtains its natural gas through the two existing types of contracts. Therefore, the company stated that the Petrobras’ discount policy would favor distributors that obtain gas only through NPP contracts, e.g., the company Gás Brasiliano Distribuidora, property of Petrobras and located nearby Comgás, in western São Paulo state.

Furthermore, Comgás pointed out that the exclusively Bolivian contract, which was not contemplated by the discount, has a great burden in the final price of its product, which have made the final gas fare in the region more expansive for consumers.

The General-Superintendence understood that there is evidence of the existence of potential discriminatory conduct, and verified that the absence of the discount in the exclusively Bolivian contract may have caused a lack of competition in the distribution of gas in the areas supplied by Comgás. The gas sold in the regions where only the NPP contract was adopted, however would have potentially benefited from it and would have maintained competitiveness. 

The Superintendence also stated that if the practice is proven, it might have harmed competition due to the increase of gas fares in the region where Comgás operates and the consequent displacement of industries to areas artificially favored.

With the opening of the Administrative Proceeding, Petrobras will be notified to present its defense. At the end of the evidentiary stage, the General-Superintendence will issue a technical opinion either for the conviction or the filing of the case, referring the case for trial by CADE’s Tribunal.