Germany’s Federal Cartel Office has raised concerns over pricing competition in the country’s oil market, following an investigation into the sector’s price quotation practices. The antitrust authority, which launched its inquiry in 2022 in response to soaring prices after Russia’s invasion of Ukraine, is calling for enhanced legal regulation of price reporting.
The investigation, conducted in two stages, scrutinized refinery pricing, fuel imports, supply chains, and market behavior. Its goal was to bolster competition and improve price transparency. The findings revealed significant risks associated with price quotations, which play a pivotal role in shaping prices throughout the oil industry.
“The investigations have once again shown that the conditions for functioning competition in the mineral oil sector in Germany are difficult,” said Andreas Mundt, head of the Cartel Office.
Price quotations, which are often linked to wholesale procurement contracts, influence retail prices indirectly. These quotations are typically reported by agencies like S&P Global Commodity Insights (Platts) and Argus Media, based on market transactions. However, the Cartel Office discovered that some quotations were based on limited data and that a small group of market participants dominated the reporting process, raising concerns about potential price manipulation.
“According to the investigations, there are incentives and opportunities to influence individual price quotations in an anti-competitive manner,” the report stated.
In light of these findings, the Cartel Office is urging tighter legal requirements on price quotations and recommending measures to better safeguard against manipulation. Additionally, the authority has expressed concern over the increasing frequency of price changes at petrol stations. In early 2024, prices changed around 18 times a day—up from four to five changes a decade ago—creating a lack of price stability and transparency, which complicates consumers’ ability to find the best deals.