Spanish competition watchdog investigates major oil companies

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oil companies

MADRID – Repsol, BP and Cepsa confirmed on Wednesday that they, along with several other oil companies, are under investigation for possible anti-competitive practices in the energy industry.

The three companies confirmed this on Wednesday. They also indicated that they will fully cooperate with the competition watchdog CNMC and comply with all competition rules. “The CNMC inspected our Madrid office. BP cooperated with the CNMC throughout the process,” BP was quoted as saying in El Mundo newspaper.

Earlier on Wednesday, the CNMC said it had launched an investigation into several operators in Spain’s energy industry. To this end, between November 28 and December 2, the organization “raided” the headquarters without identifying the companies under investigation. All the dominant players in the Spanish oil industry are under investigation, according to a source close to the investigation.

Complaints from low-cost competitors

The investigation followed complaints received by CNMC from low-cost competitors. These included Ballenoil, Gasexpress, Petroprix, Plenoil and Petrocar. They have accused the big three of price-fixing as a result of the additional discounts that the three energy companies began to apply to their gas stations because of the 20 cents per litre discount approved by the government.

Increased energy prices

After the war in Ukraine, energy prices rose in Spain, as elsewhere in Europe. As a result, the revenues and profits of energy companies also increased. This in turn prompted the authorities to intervene in the market with subsidies and new taxes. People became increasingly concerned about price transparency.

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Related: CNMC investigates Spanish energy companies

In 2015, the CNMC imposed fines of €22.8 million on Repsol and several other companies for matching fuel prices at filling stations. The competition watchdog said on Wednesday that inspections are a preliminary step in the process of investigating alleged anti-competitive practices.

If there is evidence of prohibited practices, disciplinary proceedings will start

If the inspection leads to “evidence of practices prohibited by Spanish competition law and by EU treaties, disciplinary proceedings will be formally initiated,” the CNMC said. Anti-competitive practices can lead to fines of up to 10% of the total business volume of the infringing companies in the year immediately preceding the breach, the watchdog said in its statement.

Kafkaesque situation

The case has put the regulator in a Kafkaesque position as it could lead to sanctions against the big oil companies for doing what the government required of them: to participate and offer lower prices to consumers.

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