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Launch of Sector Inquiry into Refineries and Oil Wholesale Sector

Date of issue: 27.09.2012

The Bundeskartellamt has launched its second sector inquiry into the oil sector. The focus of this inquiry will be on competitive conditions on the production and wholesale levels of the sector, which are upstream of the petrol station markets. These include the refinery sector on the one hand and the physical transport and storage of crude oil and oil products on the other. At the same time the inquiry will examine trading activities in the oil wholesale markets.

Andreas Mundt, President of the Bundeskartellamt stated: "Our first sector inquiry into the fuel markets produced some useful insight into market activities in the petrol station markets. In particular, the price setting patterns of the companies came to light, which in our view have revealed competition problems. In the next stage we will examine the intensity of competition in the upstream refinery and wholesale markets. We will also examine more closely in what form price movements in crude oil and oil products are passed on to the motorist."

The aim of the sector inquiry is to obtain information about the intensity of competition in the refinery and oil wholesale markets and to reveal any competition problems. Corporate interlocks between the oil companies at the refinery, transport and tank storage level will also come under closer scrutiny. Another object of analysis will be the contractual practices in the wholesale trade with oil products. Further aspects on which the sector inquiry will focus will be refinery costs as well as the relationship between crude oil prices, wholesale prices and petrol station prices.

The sector inquiry is of great significance for the Bundeskartellamt's case practice, not only in respect of the market levels under examination but also for assessing the intensity of competition in the petrol station markets. The sector inquiry is also intended to give impetus to the public and political debate on the subject.

In the first sector inquiry into the oil sector, which was concluded in May 2011, the focus lay with the petrol stations and their pricing strategies. The results of that inquiry were instrumental in proving the existence of a dominant oligopoly of the major oil companies in the petrol station markets.

After evaluating the replies to its structural and quantitative enquiries the Bundeskartellamt will present the results in a report and publish them for discussion.

General information on sector inquiries:
The Bundeskartellamt may conduct an investigation into a specific sector of the economy if special circumstances suggest that domestic competition may be restricted or distorted (so-called sector inquiry, § 32 e GWB (German Competition Law). It should be noted that sector inquiries are not proceedings against specific companies.

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