Thu, May 16, 2013 - Page 15 News List

EC raids offices of major oil firms over price fixing

AFP, BRUSSELS

The European Commission (EC) has carried out surprise inspections at several major oil companies over possible price fixing in breach of EU anti-trust rules.

The commission did not name any of the companies involved in Tuesday’s raids, but British energy giant BP, Shell and Norway’s Statoil said that their offices had been visited.

The commission statement explained that even small distortions of the market could have a “huge impact on the prices of crude oil, refined oil products and biofuels purchases and sales, potentially harming final consumers.”

In a statement, BP confirmed it “is one of the companies that is subject to an investigation ... We are cooperating fully with the investigation and unable to comment further at this time.”

“We can confirm that Shell companies are currently assisting the European Commission in an inquiry into trading activities,” a Shell spokesman said.

Norwegian firm Statoil and Platts, the world’s leading oil price reporting agency [PRA], also both confirmed they were being investigated.

The European Commission said 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.”

“These inspections took place in two EU member states,” a statement said, adding that one country in the European Economic Area (EEA) — of which Norway is a member — was also involved.

“The Commission has concerns that the companies may have colluded ... to manipulate the published prices for a number of oil and biofuel products,” it said.

Additionally, the firms “may have prevented others from participating in the price assessment process, with a view to distorting published prices.”

British motoring groups and politicians lined up to voice their anger at the allegations.

Britain’s Office of Fair Trading ruled out a probe four months ago, concluding there was “very limited evidence” that pump prices were being manipulated.

Former Liberal Democrat treasury spokesman Matthew Oakeshott compared the allegations to the Libor scandal, which resulted in several banks paying out huge settlements over claims they manipulated the key interest rate.

Larry Neal, the president of Platts, rejected similar accusations in a letter to the Financial Times earlier this week.

“Your comparison of PRA activity to Libor is a false one,” he said. “While PRAs do obtain information from ‘traders who may have a vested interest in moving the markets,’ the agencies do not have any such vested interest,” he added. “In contrast, our role is providing market transparency.”

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