German petrol prices too high, says cartel authority

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22 May, 2011 Updated Sun 22 May 2011 14:35 CEST
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A new report from the Federal Cartel Office (FCO) has concluded that German motorists pay too much for their fuel.

The report, which will be officially released next week, is an exhaustive study of the development of petrol prices over the last three years.

"We won't accept any further concentration of the market," the FCO President Andreas Mundt said. "Consumers who look for cheaper stations to refuel at strengthen competition."

According to the Bild am Sonntag newspaper, the FCO did not find evidence of actual price-fixing, but that this was not the aim of the report.

The FCO also investigated the practice of raising fuel prices ahead of holidays, before Easter and at weekends – sometimes only for a few days or hours.

The authority said that the structure of the market disadvantaged the consumer.

The German car fuel market is dominated by five oil companies: Aral/BP (market share: 23.5 percent), Shell (22 percent), Jet (10 percent), Esso and Total (7.5 percent each).

The FCO investigation apparently uncovered what it called "synchronous behaviour," where the two market leaders have been dictating prices to the others. If the first company increases its price, the second follows suit within hours. The other three members of the "oligopoly" then do the same. This also happens when prices are lowered, though more slowly.

The FCO believes that all the large oil companies maintain a nationwide network that observes and reports on its competitors' prices. This reportedly makes outright price-fixing unnecessary.

The German automobile association ADAC has called on Economy Minister Philipp Rösler to protect competition. The ADAC said Germany could copy initiatives from other countries: in Austria, fuel prices can only be altered once a day, while in Australia, price increases have to be announced a day in advance.

DAPD/The Local/bk



2011/05/22 14:35

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