The LPG Competition Commission By Florence Gasket At Isnare.com Ezine Articles

LPG is known to be the most useful and effective energy alternative for domestic, as well as business, use. The fact that it is offers versatile usage at lower costs than other energy sources, accompanied with its environmentally-friendly nature, greatly increases the demand among people. This can sometimes make some suppliers charge more than they should.

The job of the Competition Commission is to make sure that there is healthy competition in the market between different companies. This is necessary because in a competitive business environment, not only the companies but also the customers obtain benefits in the form of competitive prices, along with quality services and facilities.

A concern was expressed regarding the fact that the competition in the LPG market is not based on the major regulated principles, but on the other practices that the LPG supplying companies do, in order to keep up with the competition. This makes it difficult for new entrants to keep up with the ongoing competition in the market. In the Competition Commission’s view, this is the distortion or restriction of the competition.

The LPG Competition Commission pointed out that the quality of competition in the market is not what it should be and there are several factors that might be contributing to the restriction of competition. The number of LPG suppliers in the market is not too large, which limits the choice of supplier for people, and these people do not have much choice when it comes to switching suppliers. The prices that are charged for different customers also vary greatly, and the suppliers don’t have a justifiable reason for the pricing policies.

This all results in the competition being less effective, and the customers end up paying more than they ought to. The LPG Competition Commission has also expressed the fact that all information is not conveyed to the customers and there is a lack of information. And as the customers do not have enough information, they cannot compare different prices and suppliers.

The LPG Competition Commission is of the view that the present scenario makes the system less effective for the customers, because there are some leading suppliers while the others are only on a small scale - and they don’t get a lot of opportunity to expand their business and facilities. The market is concentrated, and the major competitors get all the customers and charge the prices according to their own criteria and the customer, with a limited choice, does not get the best deal and ends up paying more in a static market.

Another concern showed by the LPG Competition Commission was that the large suppliers may be taking advantage of the vulnerability of people living in rural areas. This is because these people have limited choice, and the information available to them is not enough. The people living in areas that are out of the reach of the mains gas network are dependent on the LPG suppliers, and due to their energy requirements they agree to pay the relatively higher prices.

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