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Wednesday’s findings from Germany’s Federal Cartel Office indicate potential competitive risks in the country’s oil market, particularly concerning price quotations.
According to Reuters, the antitrust authority has called for stronger legal regulation to ensure transparency and prevent manipulation in the sector.
The investigation, launched in 2022 following price developments after Russia’s invasion of Ukraine, scrutinized refinery pricing, fuel imports, supply chains, and market behaviors. The Cartel Office aims to bolster competition and enhance price transparency within the oil industry.
Cartel Office head Andreas Mundt highlighted the challenges in maintaining functional competition in Germany’s mineral oil sector, citing the significant role of price quotations in the industry’s pricing structure.
These quotations are tied to wholesale procurement contracts and indirectly affect retail prices. They are typically issued by price-reporting agencies such as S&P Global Commodity Insights and Argus Media, based on reported transactions.
The inquiry uncovered that some price quotations were derived from limited data, with few market participants controlling the reporting process, which could lead to price manipulation. "According to the investigations, there are incentives and opportunities to influence individual price quotations in an anti-competitive manner," the report stated.
To address these concerns, the competition watchdog recommends stricter legal requirements for price quotations and is exploring ways to safeguard against manipulation. The Cartel Office is also considering direct action to investigate the risks associated with price quotations.
The watchdog expressed additional concerns over the increasing frequency of price changes at petrol stations. By the beginning of 2024, prices were adjusted approximately 18 times per day, a significant increase from the four to five daily changes observed a decade ago. This pattern complicates price transparency and challenges consumers in finding affordable options.
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