site.btaCompetition Commission Launches Proceedings to Establish Fuel Market Cartel Agreements

Competition Commission Launches Proceedings to Establish Fuel Market Cartel Agreements

Sofia, February 25 (BTA) - The Commission for Protection of Competition (CPC) has launched proceedings to establish malpractice with dominant position and anti-competition practices (cartel agreements) on the markets for sale of fuels, the Commission said Thursday. CPC has accepted a sectoral analysis of the competitive environment and sale of fuels in Bulgaria.

The survey shows that there is a certain identity in the pricing policy on the retail trade market applied by the companies Shell Bulgaria RAD, Rompetrol Bulgaria EAD, Eco Bulgaria OOD, OMV Bulgaria OOD, Petrol AD, NIS Petrol EOOD and Lukoil Bulgaria EOOD. This is distinguished by continuous high retail prices and the lack of timely and adequate reaction to the downward trend of wholesale prices and production prices, which could be the result of anti-competition practices in the form of cartel agreements.

In respect to Lukoil Neftochim Bourgas AD, the sectoral survey shows that over the studied period the price of motor vehicle fuels for the domestic market is higher than that offered by the company for exports under similar conditions. Non-market factors can also influence the production prices of oil products in Bulgaria, CPS says. Thereby, Lukoil can receive additional benefits from its operation in Bulgaria, particularly in view of the fact that it is a prominent producer, importer and leader in the local market in Bulgaria

CPC has also established the existence of administrative and legal barriers before the fuel suppliers at national level, related to the functioning of tax warehouses in this country. It is a particular problem that a large portion of the suppliers do not have their own tax warehouses because they cannot meet the requirements of the law to develop and register such. These include an initial capital of 500,000 leva and warranties of up to 30 million leva.

CPC recommends that stat authorities undertake the necessary actions to ease the access of merchants to excise warehouses. This can be done by means of bilateral agreements with other EU member states for reciprocal storage of obligatory oil and oil product storage on their territory.