Competition opens file against Repsol for making fuel more expensive for its competitors

2023-12-26 14:44:28

This Tuesday, the National Markets and Competition Commission (CNMC) opened a sanctioning file against Repsol for alleged abuse of a dominant position in the fuel market. The organization considers that the oil company could have “taken advantage of its dominant position” to increase the price it charges its competitors to purchase fuel on the wholesale market in order to be able to offer high discounts to its customers and “gain retail market share to the detriment of certain competitors.

The file comes a year after the CNMC registered the headquarters of Repsol, but also that of Cepsa and BP, following a lawsuit filed by Aesae, the association that brings together ‘low cost’ gas stations. Instead, now it only opens a file for Repsol and leaves out the other two major oil companies in the country. The company denies the alleged irregularities by “flatly rejecting” the file. “Repsol does not have a dominant position in the Spanish fuel market and strictly complies with competition regulations,” the company indicates.

They highlight that the company has made an “enormous effort” to help its customers with discounts after the price increases derived from the war in Ukraine, and they estimate the investment for discounts at its service stations at 500 million euros. “In short, the CNMC has opened a sanctioning file for a measure aimed at favoring consumers,” Repsol considers in a statement.

And the events occurred after the Russian invasion of Ukraine, in March 2022, when the Government launched a direct bonus to all drivers of 20 euro cents per liter of fuel in the face of skyrocketing prices at gas stations. . The oil majors decided to add to that discount another additional 10 cents for their registered customers, something they were able to do, according to the CNMC, by taking advantage of their dominant position due to having production capacity and selling fuel at a higher price to their competitors.

The ‘low cost’ applaud the decision

For all this, the ‘low cost’ companies paid more for fuel to Repsol in the wholesale market, according to their complaint, and had no margin to match the offers that these large oil companies made to their end customers. «Given Repsol’s position in the wholesale market, the conduct would have represented an exclusionary strategy against third-party competitors – independent service stations. Furthermore, they would have had the ability to erode the commercial margins of said competitors and limit competition in retail distribution,” explains the organization headed by Cani Fernández.

These behaviors could violate article 2 of the Law on the Defense of Competition (LDC) and article 102 of the Treaty on the Functioning of the EU (TFEU), explains the CNMC. Despite this, he clarifies that this file does not presuppose a fine for the company: «The initiation of this file does not prejudge the final result of the investigation. A maximum period of 24 months is now open for its investigation and resolution,” says the supervisory body.

For its part, the National Association of Automatic Service Stations (Aesae) welcomed the CNMC’s decision and considered that it is a “clear warning” to any “dominant company that wants to prevent competition.” In a statement, its president Manuel Jiménez Perona pointed out that automatic gas stations have made a “very important effort in recent years to contain the rise in prices and minimize its effect on the consumer,” also having to “deal with practices of dubious legality due to part of the competition, preventing them, on many occasions, from developing the opening plans they had planned.