Cofece fine for 2,414 million pesos to LP gas companies that colluded to fix prices and manipulate the market

The Federal Commission of Economic Competition (Cofece) fined a total of 2,414 million 51,954 pesos to 53 companies and 34 people who acted on its behalf, for colluding to set, raise, arrange and manipulate the price of distribution of liquefied petroleum gas (LP gas) through plants and sale in service stations, as well as dividing, distributing, assigning or imposing portions of the market, through clientele in the national territory.

The foregoing, based on article 53, sections I and III of the Federal Law of Economic Competition (Law or LFCE). LP gas is the most widely used fuel for domestic use in the country and, according to the National Survey on Energy Consumption in Private Homes of the National Institute of Statistics and Geography, eight out of 10 families use it as their main fuel for cooking of food, established the regulator as context before this sanction.

Only from January to June 2022, the value of total sales of LP gas at the national level amounted to more than 36,000 million pesos, according to data from the Energy Information System of the Secretary of Energy.

Once the procedure followed in the form of a trial was concluded, the Plenary Session of Cofece determined that there were sufficient elements to prove the absolute monopolistic practices carried out by the accused distributors – who are part of the Soni, Nieto, Tomza, Simsa, Global, Uribe and Metropolitano—in Mexico City and some municipalities of the State of Mexico, Culiacán, Colima and Tamaulipas.

“Through these conducts, the economic agents agreed to maintain their market shares and avoid competing with each other, which resulted in a deterioration in the supply conditions of this important energy source, as well as the charging of undue price premiums,” Cofece said.

As a result, the Plenary of Cofece determined that, from 2007 to 2019, the offenders caused an estimated damage amounting to 13,392 million 548,798 pesos. This amount is 5.5 times higher than the fine imposed on them.

Considering the magnitude of the damage, the intentional nature of the behaviors and the relevance of the affected market in the general welfare, the behaviors were classified as highly serious and the indicated fines were imposed.

The Plenary also considered it appropriate to impose the sanction of disqualification on various natural persons who participated in some of the accredited agreements during the validity of the LFCE.

Economic agents have the right to challenge this resolution by means of an indirect amparo proceeding before the Judicial Power of the Federation.

karol.garcia@eleconomista.mx