Competition Commission warns businesses over fuel price gouging
Oil prices have surged past $100 a barrel and South African businesses are being put on notice by the Competition Commission.
South Africa's Competition Commission is cracking down on businesses that exploit rising oil prices, warning that price gouging during periods of fuel volatility is illegal and prosecutable.
Consumers could face higher prices for the cost of everyday goods, with global oil prices surging above $100 (almost R2,000) per barrel over the past two weeks as a result of the conflict in the Middle East.
The Competition Commission has cautioned that unscrupulous businesses may seek to exploit the uncertainty surrounding fuel prices by inflating costs beyond what the actual increases warrant, reports MyBroadband.
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What products and services are most at risk?
Unregulated fuels such as diesel retail prices and jet fuel are considered particularly vulnerable, along with oil-based products, including nitrogen-based fertilisers and plastics. Fuel-intensive services covering air, land and sea transport, logistics, food products and delivery services also face significant risk.
What are businesses legally allowed to do?
South African case law sets a clear precedent for how businesses must respond to fuel cost increases. Businesses may not raise prices in anticipation of future fuel cost increases and may only do so when they experience actual increases.
Any price adjustment must be proportionate to the cost increase incurred, meaning that profit margins after a fuel price surge should not exceed those recorded before the increase. Once fuel costs decline, prices must fall accordingly and without delay.
What are the consequences of price gouging?
Businesses that increase prices ahead of any actual fuel cost increase, or raise them by far more than their costs justify, risk prosecution and a finding of guilt for price gouging. The same applies to businesses that maintain elevated prices after the oil price shock has subsided.
How can the public report suspected price gouging?
The Competition Commission has urged the public and businesses to report suspected price gouging.
Reports should include the complainant's name and contact details, the name and location of the business concerned, the product or service affected, the old and new prices, and the reason for suspecting price gouging.
Complaints can be submitted by email to [email protected] or via WhatsApp at 084 743 0000.
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