Price fixing claims

Klaus Picard, head lobbyist of Germany's oil industry association MWW, is striking back. On Monday he went on the offensive, saying there was no indication of pricing agreements between German gas station operators. Later this week the Federal Cartel Office in Berlin is expected to issue the results of its investigation into Germany's oil industry. Parts of it were leaked to the press over the weekend, increasing public anger at what are widely regarded as excessively high fuel prices at gas stations across the country.

No price fixing

At a press conference in Berlin, Picard said there was no illegal price fixing at all. "The Cartel Office has been investigating for three years, scrutinizing millions of data and turning over each stone three times." The cartel watchdogs intended to prove that prices were being fixed, Picard claims. "But they didn't succeed, because there is no price fixing." If the Cartel Office had the guts, it would admit it and say: 'Sorry, we were wrong.'"

About 70 percent of Germany's fuel market is controlled by the five biggest companies in the sector. Aral and Shell are what the antitrust report calls the 'signaler' in most of the price rounds. The two enterprises alone have a 20 percent share of the market and usually take the initiative when it comes to raising prices at the pumps.

Signalers and pacemakers

The oil industry lobby feels justified in brushing off allegations of illegal pricing agreements because so far the authorities have failed to turn up any hard evidence.Their report merely states that oil companies monitor competitors' prices closely and act accordingly.

"With the assessment that this is an oligopoly controlling the market, the antitrust office tries to discredit an entire industry sector by linking it to the legal grey area and tarnishing its reputation", said Picard. Excluding taxes, he argues, fuel prices in Germany are among the lowest in Europe. If somebody wanted to relieve motorists, they should lower the taxes imposed on gas.

However many politicians are siding with the Cartel Office. "I am very disturbed that a few players are stipulating prices so there is no real competition", Volker Kauder, a leading Christian Democrat, complained. On German TV Kauder called it an outrage that should be remedied very soon. Christine Scheel of the Green party proposed in an interview with German national radio 'Deutschlankfunk' that big oil companies should be broken up into smaller enterprises. At the very least, Scheel said, prices had to be more transparent. Germany's new economic minister Philipp Rösler was more restrained. Rösler, also the new chairman of the Liberal Free Democrats, said he wanted to wait for the Cartel Office's report on oil prices to be published. It was too early to jump to conclusions without being able to study the report, he said. But even the free-market-liberal Rösler didn't rule out tougher legislation in the future.

Lower taxes could help

Germany's powerful motorists' association ADAC has already called for consequences. Since antitrust watchdogs have stated that a lack of competition on the German fuel market has been leading to elevated gas prices, quick action is needed, the motorists' lobby demanded. The economics minister and the Federal Cartel Office should come out with concrete proposals to guarantee real competion at Germany's fuel pumps.

Author: Marko Langer /tko
Editor: Susan Houlton