Germany’s antitrust authority on Wednesday said an examination of the country’s oil market showed signs of pricing competition issues, urging stronger legal regulation on price quotations.
In 2022, the Federal Cartel Office launched an investigation into Germany’s refinery and wholesale fuel market in response to price developments following Russia’s invasion of Ukraine.
The two-stage inquiry examined refinery-level pricing, fuel imports, supply chains, and market behaviours, aiming to enhance competition and improve price transparency in the sector.
The investigation identified significant competitive risks related to price quotations, which play a crucial role in pricing across the entire value chain of the oil industry.
“The investigations have once again shown that the conditions for functioning competition in the mineral oil sector in Germany are difficult,” Cartel Office head Andreas Mundt said in a statement.
Price quotations are usually linked to wholesale procurement contracts and can indirectly influence retail prices. They are provided by price-reporting agencies such as S&P Global Commodity Insights (Platts) and Argus Media, based on reported transactions.
However, the cartel office investigation found that some price quotations were based on limited data, with a small number of market participants dominating the reporting process, raising concerns about potential price manipulation.
“According to the investigations, there are incentives and opportunities to influence individual price quotations in an anti-competitive manner,” the report read.
The competition watchdog recommends imposing stricter legal requirements on price quotations and exploring ways to better protect them from manipulation, adding that it was also considering taking action itself and investigating the price quotation risks.
It said it was also concerned about the increasing number of price changes at petrol stations. By the beginning of 2024, prices changed around 18 times a day, up from four to five changes a decade earlier. Such frequent changes affect transparency and make it difficult for consumers to find cheap prices, it said.
Source: Reuters