The competition watchdog has dismissed calls for an investigation into the possibility of a fuel cartel meant to stifle competition among suppliers, insisting it had no evidence warranting such action.
Suspicion of possible collusion was raised in the wake of the Competition Office’s decision in a case in which the owner of M&N Camilleri petrol station in Rabat revoked a diesel price cut after being pressured to do so by his supplier, San Lucian Oil Company Ltd, a member of the Falzon Group Holdings Ltd.
It also emerged that other station owners had complained with the same supplier about the Rabat fuel station owner’s decision to cut the selling price of diesel. The findings raised concerns among consumer bodies as well as market experts about the possibility of a cartel whereby all parties would agree to keep the same price.
Reacting to the findings, the Consumer Association had expressed its disappointment that the watchdog focused exclusively on this case, despite its request to look at the bigger picture. In his reaction to the ruling, Mario Camilleri, of M&N Camilleri petrol station, had told this newspaper that competition was being stifled by the fact that diesel suppliers were going by the prices set by the State-owned
In his reaction to the ruling, Mario Camilleri, of M&N Camilleri petrol station, had told this newspaper that competition was being stifled by the fact that diesel suppliers were going by the prices set by the State-owned Enemed. Mr Camilleri had called for a ban on such practice in a bid to have a liberalised market from which consumers would benefit.
Replying to questions by this newspaper, a Competition Office spokesman, however, said that “parallel behaviour alone between competitors is normally not sufficient to prove the existence of unlawful anti-competitive behaviour”.
He added that competition law provisions would only apply if there was evidence that such conduct was the result of an “agreement” or, at least, “a conscious common intention of coordination among competitors”.
“At the moment, the office has not received any complaints or any information has been provided that there is some form of collusion in the fuel market,” he said. This newspaper also sought the views of competition law expert
This newspaper also sought the views of competition law expert Sylvann Aquilina Zahra who questioned the watchdog’s decision to focus exclusively on the ‘agreement’ between the Rabat petrol station and one of its suppliers.
“It is not very clear from the decision whether or not the Office for Competition considered the possibility or otherwise of wider coordination involving perhaps other petrol stations supplied by the same supplier. An economic assessment of the fuel retail market, following the definition of the relevant market, would have helped to shed light on whether or not price competition in this market can in reality be effective,” she said.
On a positive note, the expert remarked that the decision outlined the retailers’ risk to yield to such pressure because, in so doing, they became party to anti-competitive behaviour.
Dr Aquilina Zahra noted that any decision must determine the duration of an infringement, even if there was no intention to impose fines, as this would give a clearer indication of the gravity of the breach. She noted that office decisions must be as comprehensive as possible because such rulings could be invoked in an individual or collective damages action.