South Africa's Competition Commission said that it had settled a case of excessive pricing and abuse of market dominance by Sasol which the government said could help reduce fertiliser prices.

The commission said South African petrochemical company Sasol would divest in five of its fertilizer blending facilities and cease within 25 months all importation of ammonia other than for use in South Africa.

It said an application to confirm the agreement, expected to remain binding for a period of 10 years after the disposal of Sasol's affected assets, would be heard on July 14.

The commission said that "The pricing and divestiture commitments will remove Sasol's incentive and ability to exclude competitors in fertilizer blending and retailing. We note that these remedies do not address the fact that Sasol will remain the sole local producer of ammonia."

The commission said Sasol would sell ammonium nitrate based fertilizers on an ex works basis from its plants at Sasolburg and Secunda.

Mr Marius Brand MD of subsidiary Sasol Nitro said that "We also believe that these changes will create several new opportunities for Sasol Nitro to improve our offering to the end customer, our farmers.”

In 2009, Sasol was fined ZAR 250.7 million (USD 33.83 million) as a penalty for fixing prices in the fertilizer and phosphoric acid sectors.

(Sourced from Reuters)