Investigations Into the European Fuel Market Continue: The ICA Launches an Inquiry Into the Italian Fuel Market

As retail fuel prices increased in the course of 2022, national competition authorities across the EU received a large number of complaints from consumers, bringing the matter to the top of national political agendas.

A number of national authorities (e.g. in the UK, Ireland, Italy and Germany) implemented fuel duty cuts in order to outbalance the price increase.

However, some of these cost cuts did not appear to lead to any significant price decreases in the short term. Hence, concerns were raised as to whether there were collusive practices along the oil supply chain.

On January 30, 2023, the Italian Competition Authority (the “ICA”) launched a market inquiry into the Italian fuel market.[1] The purpose of the inquiry is to investigate the competitive dynamics of extraction and refining, as well as to analyze the price changes that have occurred at all distribution levels, in order to ascertain the competitive conditions across the whole oil supply chain.

Other national authorities have also launched similar investigations into their national markets. Interestingly, only the ICA decided to investigate the whole supply chain, from the crude oil extraction phase and its refinery to retail distribution at fuel stations. Other market inquiries only focused on refinery, and wholesale and retail fuel distribution.

In particular, the Austrian Federal Competition Authority (the “AFCA”) released its final report on August 22, 2022,[2] and found that refineries posted strongly increased profit margins in the months since Russia invaded Ukraine. It concluded that higher fuel prices are not due to a lack of competition among filling stations but have been caused in particular by the surge in global fuel prices and/or by the refineries. Interestingly, the AFCA observed that the issue of global prices extends beyond national level, thus requiring cooperation between national authorities and the European Commission.

The Irish Competition and Consumer Protection Commission (the “CCPC”) also conducted an analysis of the retail motor fuel sector with a particular focus on the 19-day period between March 2 and 20, 2022. On November 22, 2022, the CCPC released the results of the investigation.[3] Similarly to the AFCA, the CCPC concluded that the increase in retail prices was driven by the increase in international prices rather than by a lack of competition. Moreover, it observed that the positive effects on price due to excise cuts are often not seen immediately, as it takes time before fuel stations receive supplies of fuel taxed at the lower rate.

On November 28, 2022, the German Federal Cartel Office (the “FCO”) released its interim report on the sector inquiry into refineries and fuel wholesale.[4] The investigation was mainly initiated because of the persistent decoupling of prices charged at fuel stations from the crude oil price in the weeks and months following Russia’s invasion of Ukraine. While the FCO found that there were structural issues in the market, such as vertical integration and high market transparency, it concluded that there were no indications of price-fixing agreements between mineral oil companies. It also added that further investigations will be required to analyze whether joint market dominance could be an issue at the refinery level, although the FCO is aware that under competition law there are legal hurdles to determine abusively excessive prices.

Finally, on December 6, 2022, the UK Competition and Markets Authority (the “CMA”) published an update on its Road Fuel Market Study, mainly aimed at checking whether the cut in fuel duty announced by the Government in March 2022 had been passed on to consumers.[5] The CMA observed that 2022 was the most volatile year ever for fuel prices, and that retailers’ and refining margins actually increased. While it found no evidence that the increase in refining margins was down to competition problems, as they are largely dictated by global supply and demand, the CMA committed to further investigate whether the increase in retailers’ margins could be due to weaker competition. In this respect, the CMA observed that prices tend to be higher in some local areas of the UK where fuel stations face limited or no competition. The sector inquiry launched by the ICA is part of a wider focus on the sector at both EU and national level. From a consumer law perspective, in January 2023, the ICA carried out preliminary investigations into the changes in fuel prices that occurred in the first half of 2022, and initiated inspections against several major oil companies, which allegedly failed to exercise due care in controlling their distribution networks, in violation of Article 20 of the Italian Consumer Code. The alleged irregularities concern, in most cases, a discrepancy between the advertised price and the higher price actually charged at fuel stations. In other cases, the ICA noted a failure to display the charged price or to communicate the price to the Osservaprezzi Carburanti, a public source that consumers can use to find the cheapest fuel station.

[1] ICA, decision of January 30, 2023, No. 30456, case IC54 - Prezzi dei carburanti per autotrazione - dinamiche concorrenziali dall’estrazione alla distribuzione (https://www.agcm.it/dotcmsdoc/bollettini/2023/5-23.pdf).

[2] AFCA press release of August 22, 2022 (https://www.bwb.gv.at/en/news/detail/afca-publishes-final-report-on-sector-inquiry-into-austrian-fuel-market).

[3]Analysis of the Irish Retail Motor Fuel Market, published on November 22, 2022 (https://www.ccpc.ie/business/wp-content/uploads/sites/3/2022/11/Analysis-of-the-Irish-Retail-Motor-Fuel-Market.pdf).

[4]FCO press release of November 28, 2022 (https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2022/28_11_2022_SU_Raffinerien.html;js).

[5] CMA press release of December 6, 2022 (https://www.gov.uk/government/news/cm