Reed Smith Client Alerts

The situation in Germany as regards fuel prices continues to be tense. Although the price of crude oil on the world market has again fallen despite the ongoing war in Ukraine, fuel prices in Germany remain high. Only recently, the German legislature announced its proposal to increase the powers of the Federal Cartel Office (FCO) to investigate the domestic fuel sector (see our previous alert). The FCO will now initiate a sector investigation targeting competition in the refinery and wholesale markets.

Auteurs: Michaela Westrup

On 12 April 2022, the FCO announced that it would initiate a sector inquiry “with a clear focus on the refinery and wholesale level”. Under the German Act against Restraints of Competition, the FCO may conduct sector inquiries where it suspects anti-competitive behaviour in an entire industry. Although sector inquiries do not target individual market participants, measures against individual companies are often a consequence of the market insights the FCO obtains following the inquiries.

In general, the hallmarks of a sector inquiry include the FCO’s decision to initiate it, requests for information addressed to market participants, and the FCO’s interim and final reports. Otherwise, there is no clear, formal procedure and there are no specific deadlines (at least not on the FCO’s part). As a result, the process may vary in length, but usually takes between one and three years. In the course of sector inquiries, the FCO may request documents from the parties concerned and carry out inspections at company premises.

Back in 2008, the FCO launched a sector inquiry into the German fuel sector and investigated the market at all levels, i.e., production (refining of crude oil), wholesale distribution and retail (petrol stations), with the main focus on the retail market. According to the FCO’s final report in 2011, the leading oil companies allegedly formed a dominant oligopoly accounting for approx. 65 per cent of all fuel sales in Germany.