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Big petrol firms inflating prices, watchdog says

The Local · 26 May 2011, 16:48

Published: 26 May 2011 16:48 GMT+02:00

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Bundeskartellamt president Andreas Mundt launched the watchdog’s report on the industry in Bonn on Thursday, saying that while the major firms – Aral/BP, Shell, Jet, Esso and Total – did not directly fix prices, they had an unspoken understanding about matching prices to one another.

“The companies understand each other without words. That leads to inflated prices,” Mundt said.

They were using this understanding to maintain an oligopoly – a system in which a few providers dominate the market – in the petrol station industry.

About 65 percent of fuel sales across Germany are made by the big five. Each company, rather than the franchise-holder of any petrol station, sets the prices for the whole chain.

The Bundeskartellamt monitored price changes at more than 400 petrol stations from 19 fuel companies between January 2007 and June 2010 in the areas of Hamburg, Leipzig, Cologne and Munich.

In almost all cases, either Aral or Shell was the trailblazer in hiking its prices across large areas. Exactly three hours later the other firm would adjust its own prices to match the first one. The three other major firms would then also follow suit in predictable time patterns.

The watchdog said concrete action was needed to deal with breaches of the law.

It called on lawmakers to examine whether improvements to regulations protecting consumers could be made to prevent oligopolistic pricing. Mundt said the watchdog felt a bit like an umpire in a sporting match who was powerless to do anything.

“Perhaps the rules of the game should be changed a little,” he said.

He pointed to Western Australia as a possible model for changes. There, daily petrol prices have to be announced the previous day. However, changes to the law would be needed to enforce such a measure here in Germany.

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The watchdog would take a very tough approach in future to any proposed mergers, he said.

“On the basis of our findings, we will prevent further concentration in the petrol station market and ensure that the oligopolists do not abuse their market power,” Mundt said.

DPA/The Local/djw

The Local (news@thelocal.de)

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Your comments about this article

19:26 May 26, 2011 by auniquecorn
you know when the gov´t is pushing for electric cars and other fuel alternitives these guys have no choice but to get what they can while they can.

by the time the gov´t gets off their high horse, these guys are gonna be rich and not give a sh!t.

Also, what about the Fkn 80 cents per liter tax?

Just throw the blame somewhere else. The people will understand.
01:22 May 27, 2011 by LarsBar
Comment removed by The Local for breach of our terms.
15:42 May 27, 2011 by electric38
These big oil/energy firms are taking profits now so they can smoothly move into the larger solar markets. Losing control of one industry will not put a dent in their profit.

Resident and small business owned rooftop solar install cost ahould soon see a dramatic downturn. Do a web search on "solar printing presses". The solar ink will be expensive, but the product is very marketable, inexpensive and easy to install. Plug and Play designs are interacting with the new products in a very exciting way.

There is nothing the average citizen can do about the oil companies (banks and utilities) using our subsidies to attempt to enslave us within this corporate money grab. Getting out from under their forced dependence will be an interesting battle.
18:25 May 27, 2011 by gtaglia
Lies, propaganda and nonsense. Even if the oil companies are colluding to keep the price up by a few percent, it is of little or no consequence. The great majority of the price of fuel to European consumers is composed of various government imposed taxes and fees. Government could reduce the price of fuel by half and still take in more in taxes than oil companies make in profit.
19:52 May 27, 2011 by derExDeutsche
does theLoco.de just make this Pro-Govt. poop up? The Cartels, hahahaha

The main factor in price disparities between countries is government policy. Many European nations tax gasoline heavily, with taxes making up as much as 75 percent of the cost of a gallon of gasoline.

go go Govt, go !!
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