Petrol Price-Fixing: Shell And Bp Offices Raided

[Raistlin]

At least three major oil companies are being investigated amid suspicion that they colluded to drive up the cost of oil over the last decade, potentially costing consumers thousands of pounds.

The European Commission (EC) reportedly raided the offices of BP, Shell and Statoil yesterday, citing concerns that the companies may have “manipulated the published prices for a number of oil and biofuel products”.

Motoring and consumer groups have long been calling for an official investigation into the oil industry to determine whether prices were being affected by price-fixing or manipulation.

They have claimed that oil prices could be rigged in much the same way as the Libor lending rate was.

A spokesman for FairFuelUK told the Press Association: "The sharp rises in fuel and oil prices we've seen recently have raised huge concerns about what is really driving them. The oil market isn't transparent or accountable enough. There is an urgent need for a powerful and independent watchdog to ensure that there's no market manipulation and that UK families and businesses pay a fair price for their fuel."

The price of oil has sky-rocketed since the turn of the century, costing less than $30 a barrel in 2000 compared to around $95 today.

Not just motorists affected

Those rising costs have had a dramatic impact on fuel costs: in March the average price of petrol stood at £1.40 per litre, while diesel stood at £1.46.

Of course, hiked fuel prices don’t only impact motorists. The increased cost of transporting goods means everything from groceries to electronics are driven up as well.

The European Commission statement

The EC had the following to say on the price-fixing investigation:

"The European Commission can confirm that, on 14 May 2013, Commission officials carried out unannounced inspections at the premises of several companies active in and providing services to the crude oil, refined oil products and biofuels sectors.

"The Commission has concerns that the companies may have colluded in reporting distorted prices to a Price Reporting Agency to manipulate the published prices for a number of oil and biofuel products. Furthermore, the Commission has concerns that the companies may have prevented others from participating in the price assessment process, with a view to distorting published prices.

"Any such behaviour, if established, may amount to violations of European antitrust rules that prohibit cartels and restrictive business practices and abuses of a dominant market position (Articles 101 and 102 of the Treaty on the Functioning of the EU and Articles 53 and 54 of the EEA Agreement)."

However, the EC pointed also stressed that these unannounced inspections did not “mean that the companies are guilty of anti-competitive behaviour nor does it prejudge the outcome of the investigation itself”.

Not the first investigation

It’s worth noting that this isn’t the first time the oil industry has faced a price-fixing probe. Last September, the UK’s Office of Fair Trading (OFT) said it was looking into how petrol and diesel prices were being set.

But just three months later the OFT decided against launching a full inquiry, claiming that huge price rises were down
to tax rises and the increase in oil prices, rather than money-grabbing tactics from within the fuel industry.

Today’s investigation, however, is far more in-depth and wide-reaching.