EU raids oil majors in price fixing probe

AAP
May 15, 2013

THE European Commission has carried out surprise inspections at several major oil companies over possible price fixing in breach of European Union anti-trust rules.

The Commission did not name any of the companies involved in Tuesday’s raids.

But British energy giant BP, Shell and Norway’s Statoil said that their offices had been visited.

“These inspections took place in two EU member states,” a European Commission statement said.

“The Commission has concerns that the companies may have colluded … to manipulate the published prices for a number of oil and biofuel products,” it said.

Additionally, the firms “may have prevented others from participating in the price assessment process, with a view to distorting published prices.”

British motoring groups and politicians lined up to voice their anger about possible collusion.

The Automobile Association predicted that “the lid is about to be blown off”, telling the Daily Mail that it “has been warning since 2005 about the activity of speculation in oil and fuel markets.”

David Bizley, technical director of car services company RAC, said the claims were “worrying news for motorists” and vowed his company would campaign for greater transparency in the UK fuel market.

Britain’s Office of Fair Trading ruled out a probe four months ago, concluding there was “very limited evidence” that pump prices were being manipulated.

Former Liberal Democrat treasury spokesman Matthew Oakeshott compared the allegations to the Libor scandal, which resulted in several banks paying out huge settlements over claims they manipulated the key interest rate.

Larry Neal, the president of Platts, rejected similar accusations in a letter to the Financial Times earlier this week.

“While Price Reporting Agencies do obtain information from ‘traders who may have a vested interest in moving the markets,’ the agencies do not have any such vested interest,” he added.

“In contrast, our role is providing market transparency.”