Things looked a little brighter for Sasol this week as the oil price strengthened and the Competition Appeal Court ruled in its favour, dashing any hope competition authorities had of dealing with the complicated issue of import parity pricing. This week, quoting former Competition Tribunal chairman David Lewis and the Talmud (a central text of rabbinic Judaism), the court ruled that Sasol had not charged excessive prices for propylene and polypropylene between 2004 and 2007.Among the supporting arguments for Sasol was a Talmud ruling that profit of more than 16.67% was excessive. By implication, according to Competition Appeal Court Judge President Dennis Davis, a profit of less than 16.67% is not excessive. Davis apparently assumed Sasol's margins on propylene were less than 16% and therefore not excessive.The decision by the court is a blow to the Economic Development Department and the Department of Trade and Industry, as both were hoping the competition authorities would deal with the issue of import parity pricing.Import parity pricing is what a South African producer with a dominant market position is able to charge its South African customers. It is equivalent to what the South African customer would have to pay to purchase the product from an international supplier.The commission had argued that in the case of Sasol's pricing of propylene and polypropylene this was equivalent to an excessive price. The tribunal upheld this view. The Competition Act prohibits companies from charging excessive prices.This week's court ruling follows a ruling made after Harmony Gold alleged that ArcelorMittal South Africa was charging an excessive price for steel. That case got bogged down in legal and economic technicalities and was finally abandoned by Harmony.A ruling against Sasol would have raised the possibility of a review of the ArcelorMittal case. It would also have placed the commission in the difficult position of being a price regulator and required it to oversee the pricing policies of dominant domestic suppliers.The court's decision means that if the two departments want relief from pricing practices that they argue reduce the ability of local manufacturers to compete, they will have to introduce legislation or policy to address the issue.In June last year, when the Competition Tribunal released its decision on the commission's charge against Sasol, Trade and Industry Director-General Lionel October said the tribunal's ruling was in line with his department's efforts to reduce input pricing for manufacturers."Because of the high input prices facing our manufacturers, we are uncompetitive. This ruling will help to improve our competitiveness," said October.He added that many key inputs were being charged at import parity pricing levels.The Department of Trade and Industry lodged the initial complaint against Sasol's pricing practice in 2007. In July last year Sasol announced it was appealing the tribunal's ruling.Neither government department responded to requests for comment on this week's ruling .Davis upheld Sasol's appeal. The ruling means that Sasol will not have to pay a fine of R534-million and , more critically, it will also not have to alter its pricing policies.Davis said it should not be assumed that excessive pricing cases could never succeed before South African courts. It was merely in this case that the evidence and arguments supported Sasol, he said, adding: "Some measure of latitude has to be given to firms with regard to pricing. If not, a court will become a price regulator."However, one leading competition lawyer said the court forced the evidence "down a very unhappy route which was clogged up with all manner of economic data and capital asset pricing assumptions".The case against Sasol was based on the fact that between 2004 and 2007 Sasol Chemical Industries, a subsidiary of Sasol and the only producer of purified propylene in the country, sold products to its international customers at prices lower than those charged to its South African customers.Sasol said in a statement it welcomed the court's ruling...