MDPPACPB Regulations

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(c) Illustrative examples of prohibited conduct include— 
(i) using regulated pipeline transportation revenue to sell petroleum products 
below cost in retail markets; 
(ii) financing discounted storage, handling or logistics services using regulated 
terminal returns; 
(iii) inflating internal transfer prices to raise the costs of the competitors or to 
enable margin squeeze. 
 
(5) Accounting, Documentation, and Disclosure Requirements 
A licensee subject to this Regulation shall: 
(a) maintain separate accounting records for each licenced activity as may 
be required under section 212(1) of the Act; 
(b) document all internal pricing policies, methodologies and intra-group 
transactions including contracts, invoices, and benchmarking data; 
(c) disclose cost allocations, transfer pricing arrangements, and intra-group 
transactions in formats prescribed by the Authority; 
(d) provide such records or information as may be required by the Authority for 
monitoring, audit or investigation; 
(e) submit annual statements of compliance certified by an external auditor, 
confirming adherence to transfer pricing, accounting separation and cross-
subsidisation requirements under this Regulation. 
 
(6) Separation Measures 
(a) Where the Authority determines that integration creates a risk of anti-
competitive conduct, conflict of interest or discriminatory access, the Authority 
may require structural, managerial, operational or accounting separation of 
activities pursuant to section 212 of the Act. 
 
(b) Measures that the Authority may impose include: 
(i) separate management and decision-making structures; 
(ii) separate accounting or cost-allocation systems; 
(iii) physical or operational separation of monopoly infrastructure from 
competitive functions; 
(iv) legal separation of particular licenced activities into distinct corporate 
entities; 
(v) prohibition on the holding of specified categories of licences within the 
same corporate group. 
 
(7) Burden of Proof 
The licensee bears the burden to demonstrate that: 
(a) all pricing in competitive segments is based on commercially justifiable 
costs; 
(b) no unfair internal advantage is conferred through cross-segment transfers;  
and 
(c) transfer pricing and cost allocations are reasonable, documented, and 
verifiable  comply with sections 170, 206, 207 and 212 of the Act and these 
Regulations.