Johannesburg — THE Competition Tribunal will tomorrow consider an application to confirm the settlement agreement between the Competition Commission and piped gas supplier Spring Lights Gas, the tribunal said yesterday.

In terms of a settlement agreement reached earlier this month, Spring Lights Gas will pay a R10,8m administrative penalty, equivalent to 3% of the company's annual turnover for the year to June 30 2008, the commission said yesterday.

This represents the latest competition case with a link to petrochemicals group Sasol. Spring Lights Gas was formed in 2002 as an empowerment initiative of Sasol Gas (49%) and black economic empowerment company Coal Energy Power & Resources Limited (51%).

Sasol spokeswoman Jacqui O'Sullivan said yesterday that the joint venture was an empowerment transaction to get previously disadvantaged South Africans into the industry.

When it was set up, Spring Lights provided piped gas to industrial customers in the Durban southern region. The company's reach has since spread to other areas of KwaZulu-Natal.

The company has customers in Pietermaritzburg, Newcastle, Richards Bay, Phoenix, uMbilo and Verulam.

Spring Lights' well-known customers include Engen, Sapref refinery, Mondi Merebank, NCP Alcohols, Huntsman Tioxide and Cray Valley.

Sasol Gas still provided gas to a number of corporate customers in the Durban North and Richards Bay areas, Sasol said yesterday.

The commission established that Spring Lights Gas and Sasol entered into "a suite" of agreements, in contravention of the Competition Act. The commission accused the companies of market allocation and price-fixing.

In 2008, the commission initiated a complaint based on information received from a leniency application that Sasol submitted in terms of the commission's policy.

In addition to the R10,8m fine, Spring Lights Gas has agreed not to use any market allocation clauses in the agreements with Sasol Gas "unless an exemption is granted by the Competition Commission". It has also agreed to amend the agreements in order to remove the market allocation clauses within 60 days after the confirmation of the agreement by the tribunal.

Spring Lights Gas will also develop and implement a compliance programme to ensure employees, management and directors do not engage in conduct that contravenes the competition act.

The commission also required Spring Lights Gas directors who were active in Sasol Gas to resign from the board of Spring Lights Gas. "Sasol proactively removed the employees of Sasol Gas who were directors of Spring Lights Gas when the leniency application was made," Sasol said.

During the financial year to June 30 last year, Spring Lights Gas contributed about R214m (3,8%) to the turnover of Sasol Gas and R82m (3,4%) of the Sasol Gas operating profit.