The Bundeskartellamt has released its final report today (19 February) on the refining and wholesale fuel market, highlighting concerns over price assessments, limited regional procurement alternatives, and increasingly frequent price changes at petrol stations.
Challenges to Competition in the Fuel Market
The investigation found that Germany’s fuel market is hindered by structural challenges, including high dependency on crude oil imports, vertical integration, and significant market transparency that can facilitate anti-competitive behavior. Bundeskartellamt President Andreas Mundt stated that the inquiry provides indications of market malfunctioning in the wholesale fuel sector, prompting further examination into possible enforcement actions.
Concerns Over Price Assessments
One key issue identified is the role of price assessments in determining fuel prices at multiple stages of the supply chain. These assessments, provided by specialized agencies, rely on data from market participants and influence both crude oil transactions and long-term fuel contracts. While price assessments themselves are not deemed anti-competitive, the Bundeskartellamt flagged risks of potential collusion and price manipulation, as increased transparency in pricing can enable competitors to align prices tacitly.
To address these concerns, the report suggests revising the IOSCO Principles for Oil Price Reporting Agencies and implementing stricter regulations on price assessments to mitigate the risk of manipulation and excessive market coordination.
Limited Regional Procurement Options
The inquiry also revealed that commercial fuel buyers often have restricted options for regional procurement due to high transportation costs and infrastructure limitations. With only a small number of suppliers available in many regions, businesses struggle to switch providers, reducing competitive pressure and potentially leading to higher prices.
Frequent Fuel Price Changes at Petrol Stations
The Bundeskartellamt noted a sharp increase in daily fuel price changes at petrol stations, from an average of four to five times per day in 2014 to around 18 times per day by early 2024. This volatility makes it more challenging for consumers to compare prices and adjust their refueling habits accordingly.
President Andreas Mundt emphasized the importance of further examining these frequent price fluctuations to determine whether regulatory measures are necessary to improve transparency and protect consumers.
Background and Next Steps
The inquiry was initiated in response to the fuel price surge following Russia’s invasion of Ukraine in 2022. An interim report released later that year analyzed cost structures, refinery capacity, and the effectiveness of a temporary fuel tax reduction. The final report expands on these findings, focusing on pricing mechanisms, supply chain dynamics, and market behavior.
The full report (in German) and a summary are available on the Bundeskartellamt’s website.
