Oil Companies BP And Shell Investigated For 'Damaging' Oil Price Fixing

Oil companies BP and Shell are being investigated over allegations of price-fixing, distortions that could have harmed ordinary consumers.

Norwegian company Statoil also confirmed its office in Stavanger was inspected by officials from the European Commission on Mondau as motoring campaigners spoke of fears of consumers being conned.

Peter Carroll, founder of FairFuelUK, said: "If it is proved that the oil market has been manipulated it will be a global scandal as damaging as the recent Libor debacle."

Oil companies BP and Shell are being investigated over allegations of price-fixing

The European Commission said in a statement that even small distortions of assessed prices could have a "huge impact on the prices of crude oil, refined oil products and biofuels purchases and sales, potentially harming final consumers".

The statement said: "The European Commission can confirm that, on 14 May 2013, Commission officials carried out unannounced inspections at the premises of several companies active in and providing services to the crude oil, refined oil products and biofuels sectors.

"The Commission has concerns that the companies may have colluded in reporting distorted prices to a Price Reporting Agency to manipulate the published prices for a number of oil and biofuel products.

"Furthermore, the Commission has concerns that the companies may have prevented others from participating in the price assessment process, with a view to distorting published prices.

"Any such behaviour, if established, may amount to violations of European antitrust rules that prohibit cartels and restrictive business practices and abuses of a dominant market position (Articles 101 and 102 of the Treaty on the Functioning of the EU and Articles 53 and 54 of the EEA Agreement)."

Price reporting agency Platts is also being investigated.

Tory MP Robert Halfon has led a campaign calling for a full investigation into alleged cartels and market manipulation in the oil market for the past three years.

The Harlow MP, who founded the website to campaign for cheaper petrol and diesel, said: "Last year, in a debate that I pressed for, Parliament voted unanimously for an investigation into the oil market.

"These latest allegations underline why that must happen urgently in the UK.

"High oil prices are crushing families across Britain. Motorists are being taken for a very expensive ride.

"The Government has done its bit, by freezing fuel duty for three years. Now oil companies must come clean and show some responsibility for what is happening to the international oil price."

He called on called on the Office of Fair Trading to investigate, saying: "I think what actually needs to happen is that the OFT needs to carry out a full inquiry alongside the FSA to see what has been going on.

"And if oil companies have been found wanting and if there has been manipulation of the oil market by the City or wherever it may be, then there should be severe penalties, prison, for price fixing in my view, because of the impact it has on ordinary lives, millions of ordinary lives across the country.”

RAC technical director David Bizley said the allegations were "worrying news for motorists" who are already suffering due to the high cost of keeping a vehicle.

He said: "Motorists will be very interested to see what comes of these raids. Whatever happens the RAC will continue to campaign for greater transparency in the UK fuel market and for a further reduction in fuel duty to stimulate economic growth."

Shell confirmed that its offices in London and Rotterdam were inspected yesterday.

A Shell spokesman said: "We can confirm that Shell companies are currently assisting the European Commission in an inquiry into trading activities.

"We are fully co-operating with the investigation. For legal reasons we cannot make any further comment at this stage."

A spokesman for BP said yesterday: "BP is one of the companies that is subject to an investigation that was announced earlier today by the European Commission.

"We are co-operating fully with the investigation and unable to comment further at this time."

The European Commission said that unannounced inspections are a preliminary step to investigating suspected anti-competitive practices and do not mean that the companies are guilty of any wrongdoing.

There is no legal deadline to complete inquiries, it added.

Quentin Willson, spokesman for FairFuelUK, said: "The sharp rises in fuel and oil prices we've seen recently have raised huge concerns about what is really driving them.

"The oil market isn't transparent or accountable enough. There is an urgent need for a powerful and independent watchdog to ensure that there's no market manipulation and that UK families and businesses pay a fair price for their fuel."

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