The Competition Council sanctioned the main oil companies in Romania by fines of up to 3 pc of their 2010 turnovers …

The Competition Council sanctioned the main oil companies in Romania by fines of up to 3 pc of their 2010 turnovers. Petrom, believed to have been the originator of the understanding.

The Competition Council (CC) sanctioned the companies OMV Petrom Marketing, OMV Petrom, Rompetrol Downstream, ENI Romania, MOL Romania, Petroleum Products and Lukoil Romania by fines amounting to approx. RON 880 M (EUR 250 M), the equivalent of 3 pc of their 2010 turnover.

The figure is a record at EU level.  “We are the only ones to have found direct evidence of a secret compact. This is the only direct evidence-based fine dealt to oil companies in Europe. The fine the Competition Council imposed to oil companies is the highest in Romania. Aggravating circumstances applied in Petrom’s case, which is why for it the fine is slightly above 3 pc of turnover. The companies can either admit to the deed or sue the Council,” Bogdan Chiritoiu, chairman of the Competition Council, explained yesterday during a press conference. If they choose to contest the CC decision, the companies fined have to pay a bail amounting to 10 pc of the fine.

Petrom, which, according to CC, was the originator of the deal, was followed, in the fines’ ranking, by Rompetrol with a fine below 3 pc. At the same time, MOL was the first company to withdraw the fuel variety which was the object of the compact from the market, while Rompetrol was the last to do so.

The investigation targeting the fuel market started in 2005 and was resumed in 2009, as there were suspicions the six companies had agreed in 2008 to pull off the market a petrol variety, Eco Premium, which generated under 20 pc of sales and accounted for less than 5 pc of turnover. The companies motivated their decision invoking a slump in demand for this variety and a block in the logistic chain. “It was their right to make this decision, but individually. So as not to lose the market share, they decided to pull it off the market together,” Chiritoiu further stated.

In the course of the investigation, CC found several emails in which sales directors from several companies were drawing up a plan to jointly pull Eco Premium off the market, which, according to the watchdog, is conclusive proof a cartel was set up.
“The only thing that the Romanian law, which is in agreement with the EU law, frowns upon is competing companies exchanging information so as to adopt a similar course of action. (…) According to economic logic, if a company is not aware of its competitor’s intentions, it won’t be able to take any action potentially harmful to the consumer,” the CC chairman explained, adding that the investigation concerning fuel prices may be completed by mid-year.

Trading of OMV Petrom and Rompetrol Rafinare shares, suspended

The trading of OMV Petrom and Rompetrol Rafinare shares was temporarily suspended on Tuesday at the Bucharest Stock Exchange (BVB). According to the BVB website, trading operations for these stocks were suspended under an article in the Stock Exchange Code, stipulating the need to maintain a well-ordered market and to ensure the investors equal access to information.

Petrom: Our action was perfectly legal

“Petrom believes that the sanction is not warranted and we will contest in a court of law,” OMV Petrom’s Communications Director, Dan Pazara, stated, quoted by realitatea.net. “The decision to discontinue the selling of Eco Premium was made in the context in which the legislation no longer allows us to sell this fuel variety. Consumers were offered a similar, less polluting, product, at a lower price,” the OMV representative argued.

Rompetrol: CC decision, illegal and unwarranted

Rompetrol announced, by a press release, it would contest in turn CC’s decision, which it deems illegal and unwarranted. “Rompetrol Downstream, member of the Rompetrol Group, took note with great surprise of the Competition Council’s decision to fine the company for pulling the Premium E4 product off the market. We argue that, as far as Rompetrol Downstream is concerned, the conclusions of the investigation report were unwarranted and unfounded,” the document further reads.

Lukoil: Negative signal for the business environment

Constantin Tampiza, coordinator of Lukoil’s development strategy for Romania, stated, for The Money Channel, that the company would also sue against the decision. “We will contest the Competition Council’s decision at all levels. We consider it unwarranted. There is no precedent of this kind in Europe. They speak of large earnings. Which earnings? Lukoil reported losses in Romania. This sends a very negative signal to the business environment. Everybody knows that refineries are being closed down across Europe and all these pressures could lead to the closing of refineries which report losses in Romania”. He further argued that the fuel variety that the oil companies had pulled off the market could no longer be sold legally. According to Tampiza, Lukoil was dealt a fine of approx. RON 134 M.

MOL Romania: There was no anti-competitive agreement

MOL Romania will attack in court the RON 80.27 M (EUR 18.5 M) fine ruled by the Competition Council, a fine representing 3 per cent of turnover. In what concerns the move to pull the Eco Premium gasoline off the market, MOL pointed out in a communiqué that the Hungarian group that controls it has given up the production of gasoline with metal additives since October 2004. Consequently, MOL bought from distributors and local producers the entire quantity of Eco Premium gasoline sold through the company’s network. “Pulling the Eco Premium gasoline off the fuel portfolio was an individual business decision, not the result of a concerted anti-competitive agreement,” the communiqué reads.

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