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The German legislator intends to give the German antitrust authority (German Federal Cartel Office – FCO) additional, far-reaching investigative powers to screen the German oil and fuel sector on an ongoing basis. In addition to the monitoring of price developments of German petrol stations through the Market Transparency Unit for Fuel, the FCO is likely to scrutinize refineries and intermediaries more closely in the near future. The new investigative powers are likely to include access to real-time price and volume data, and companies’ premises may be raided where the FCO suspects anti-competitive activity. As the German cabinet is set to deal with the proposal before Easter, the law could become reality within only a few months.

The existing regime

The German oil and fuel sector has been the subject of the FCO’s scrutiny already since 2013. Based on relevant legislation passed at the time, the FCO started to operate the so-called Market Transparency Unit for Fuel (Markttransparenzstelle für Kraftstoffe – MTS-K). It requires public petrol stations or companies with the authority to set their prices to report price changes for the most commonly used types of fuel: Super E5, Super E10, and diesel.

The price data collected by MTS-K is permanently shared with third-party consumer information services, which in turn make the data available to consumers via online applications, allowing consumers to keep track of actual price developments and potentially increasing competition in the relevant local petrol markets.

But the price information and relevant market insights also enable the FCO to monitor (price-related) competitive dynamics in the fuel sector and potentially intervene in case of suspicion of collusion or abusive practice. That said, in recent years, the FCO has only summarized its observations on market developments in its annual report on the MTS-K (publicly available on the FCO’s website). The FCO did not enter targeted investigations in relation to individual companies based on insights gained through the MTS-K.

German petrol prices disconnected from commodity price

Russia’s invasion of Ukraine coming on top of the already prevailing energy crisis in Germany has led to new record price peaks in the German fuel market in the first half of March 2022. In the meantime, the commodity price of raw mineral oil in the world market has declined again, but petrol continues to be far more expensive in Germany than before the war.

This development left a situation where fuel prices suddenly seem disconnected from developments of upstream input costs. Searching for possible explanations, the German government has now asked the FCO to scrutinize this sector at all market levels (i.e., from the oil commodity market to refineries and wholesalers to the petrol station operators).