14/02/2008 - 14:22

Kleenheat Gas in hot water with ACCC

14/02/2008 - 14:22

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The consumer watchdog has launched legal action in Brisbane's Federal Court against Wesfarmers Kleenheat Gas Pty Ltd, alleging misleading or deceptive conduct over the pricing of bulk LPG supplied under contract.

Kleenheat Gas in hot water with ACCC

The consumer watchdog has launched legal action in Brisbane's Federal Court against Wesfarmers Kleenheat Gas Pty Ltd, alleging misleading or deceptive conduct over the pricing of bulk LPG supplied under contract.

The Australian Competition and Consumer Commission alleges that during 2002 and 2003, Kleenheat Gas engaged in misleading or deceptive conduct by representing to particular customers that the price for Bulk LPG supplied to them would vary according to movements in Kleenheat Gas' actual costs of supply.

This was allegedly by reference to an external measure or benchmark (typically the Saudi Aramco Contract Price), or according to Kleenheat's 'list price' or 'ruling scale of prices', when in fact this was not, or was no longer, the basis on which the customer's price would be varied.

Kleenheat is also alleged to have failed to disclose the existence and nature of certain price management practices by the company, which invloved the customer account being selected as subject to a 'Managed Monthly Account' or 'Quickhit' practice, which was the actual basis for price variations.

The ACCC alleges that as a result of Kleenheat Gas applying the 'Managed Monthly Account' and 'Quickhit' practices, the basis on which Kleenheat moved particular bulk LPG customers' prices differed from that represented to them and resulted in some customers paying a higher price for bulk LPG that would have otherwise been the case.

In a statement today, Kleenheat Gas said it had closely cooperated with the ACCC investigation.

The company said it had identified 186 mainly commercial and industrial customers who were overcharged for bulk LPG as a result of these practices and these customers were now being contacted and would be refunded.

Kleenheat said the ACCC presented to the court an agreed proposal for its consideration and it looked forward to having the matter resolved.

Bulk LPG is supplied in storage vessels with a capacity of 190 kilograms or more which are primarily installed at premises of commercial customers including restaurants, cafes, laundromats and sporting clubs.

The ACCC is seeking declarations that the conduct contravened section 52 of the Trade Practices Act 1974, injunctions and costs.

 

 

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