Engen Petroleum and Shell South Africa will pay R28.8 million and R26.259 million respectively in penalties as part of a settlement deal with the Competition Commission following their involvement in bitumen price fixing.

The competition authority said on Tuesday the two firms admitted to having fixed the price with other oil companies.

The companies concerned collectively determined and agreed on pricing principles, including a starting reference price and monthly price adjustment mechanism.

These settlement agreements follow the commission's referral in 2010 of its findings against the Southern Africa Bitumen Association and seven major oil companies to the Competition Tribunal for adjudication.

Bitumen is one of the by-products from crude oil refining. Bitumen and modified bitumen products are used to surface and rehabilitate roads, as waterproofing products and to suppress dust. The end customer of bitumen is mainly government road agencies and municipalities. -