EU Commission raids oil companies in price fixing probe

Scofflaw

The offices of several firms involved in the oil market have been raided by European Commission officials.

The commission said it had concerns that "the companies may have colluded in reporting distorted prices".

It did not name the firms, and said the raids did not mean the companies were guilty of any charges.

BP, Royal Dutch Shell, Norway's Statoil and the pricing agency Platts confirmed that they were working with the authorities in their inquiries.

The investigation relates to the pricing of oil, refined products and biofuels.

http://www.bbc.co.uk/news/business-22530379

and

The commission said the alleged price collusion, which may have been going on since 2002, could have had a "huge impact" on the price of petrol at the pumps "potentially harming final consumers".

Lord Oakeshott, former Liberal Democrat Treasury spokesman, said the alleged rigging of oil prices was "as serious as rigging Libor" – which led to banks being fined hundreds of millions of pounds.

He demanded to know why the UK authorities had not taken action earlier and said he would ask questions of the British regulator in Parliament. "Why have we had to wait for Brussels to find out if British oil giants are ripping off British consumers?" he said. "The price of energy ripples right through our economy and really matters to every business and families."

http://www.guardian.co.uk/business/2013/may/14/bp-shell-oil-price-rigging

The UK apparently recently finished an investigation which has found no problems, and which has been described as "limp-wristed":

The raids come just five months after the Office of Fair Trading said the fuel market was "working well" in January. It said there was no need to launch a full inquiry in January, despite the complaints of fuel retailers that there seemed to be no explanation for spikes and dips in the petrol price.

...

"Last year we urged the Office of Fair Trading to launch a full inquiry into alleged price fixing by oil companies," he said. "I had a whistleblower approach me with a dossier which we put up on our website called petrolpromise.com and sadly nothing was done.

"The Office of Fair Trading did a limp-wristed lettuce leaf-type inquiry and they should have had a full inquiry. Now we've left it up to the EU to take action.

http://www.telegraph.co.uk/motoring/news/10058340/Regulators-must-explain-limp-wristed-petrol-price-rigging-inquiry-says-MP.html

I can't imagine why a national agency might ignore problems apparently visible from both close to and rather further away.

cordially,
Scofflaw

KyussBishop

Wow, this is extremely good to see, didn't think any country would touch it. Certainly, Obama in the US has openly stated in the past the oil price fixing 'might' be looked into, but that was at least a year ago and haven't seen much happening there.

Hopefully will start seeing a lot of people go to jail over this, though with practically nothing having been done in the wake of all the other numerous financial frauds of late, am not very expectant.


Just imagine the scale of damages from this: Literally everyone has been affected by it, since so much in economies depends directly and indirectly upon oil; fat chance of the wider populace seeing any compensation for it though, and I bet any companies confirmed as engaging in fraud here, will just get a "cost of doing business" fine, that doesn't go anywhere near undoing the profits generated.

My own views on why fraud may be getting ignored: It's so widespread, and countries balance sheets are so entangled with those of banks right now, that politicians are probably petrified of starting real prosecutions over anything, lest it kicks off a cascade of fraud investigations and massive fines and court cases for compensation, which (if done properly, and not in a limp-wristed way) would cause such a big financial hit for banks and other financial/business institutions, that it might worsen the economic crisis with it.

nesf

KyussBishop wrote: »

Literally everyone has been affected by it, since so much in economies depends directly and indirectly upon oil; fat chance of the wider populace seeing any compensation for it though, and I bet any companies confirmed as engaging in fraud here, will just get a "cost of doing business" fine, that doesn't go anywhere near undoing the profits generated.

If this was an individual country doing this I'd fully agree with you. That it's the EU investigating is somewhat different. They have come down very hard on companies, see Microsoft, for competition violations. It might still be a slap on the wrist fine, but with the EU getting involved we could see something more serious being done.

KyussBishop

True yes, and I very much hope to see that alright; will be interesting to watch this develop.