A 2015 Oil Cartel for Galway?

GalwayMagpie

There was a thread some years back on the Galway Oil Cartel.

Having recently gotten quotes for oil I believe it may be time for a new thread, and indeed a new investigation on the same subject.

I got several quotes in and around Galway of €310 for 500L of home heating oil. These are from today 28 Aug 2015
Sweeney Oil €310
Mor Oil €308.95
Elite oil €310
MacMahon Oil €310
Cosy Home Heating Oil €310

All prices can be found both on vendor site and on here:
http://www.cheapestoil.ie/heating-oil-prices/Galway.aspx

So I did a little checking around, the see how Galway fared up vs the rest of the country, the results are disappointingly unsurprising:

Donegal
Swilly Fuels €298.00
A and N Fuels €299.00
Springtown Fuels €309.00

Louth
EK Fuels €280.00
Oil4U €284.00
Morgan Fuels €285.40
Campus Oil €289.00
Topaz Local Fuels €293.00
Niall Clarke Oils €287.15


Westmeath
Curran Oil €280.00
Topaz Local Fuels €293.00


Offaly
Topaz Local Fuels €293.00
Capital Oil €310.00

Kerry
M & J Kelleher €280.00
O Keeffes €285.00

It is the same story in across the country.

The suppliers in Galway are the most expensive in the country, with 4 of them having identical prices and 1 and differing by a grand total of €1.05. Nobody comes close the €280/€290 which can be found in most counties.

If it walks like a duck, and talks like an duck ...well then....?

Squeeonline

Notify the competition authority? If they are the right group.

Discodog

Phone each one & ask if they will beat or price match a lower price ?

dastardly00

It seems like you've done a good bit of research OP.

Submitting a complaint to the Competition and Consumer Protection Commission is probably the best course of action.

http://www.ccpc.ie/make-complaint

If you are aware of anti-competitive behaviour, we would strongly encourage you to inform us. There are a number of ways to register a complaint.

GalwayMagpie

Thanks dastardly00,

Do you know if the complaints process anonymous? as in I don't want to order oil and then have it magically disappear from the tank.

nuac

GalwayMagpie wrote: »

Thanks dastardly00,

Do you know if the complaints process anonymous? as in I don't want to order oil and then have it magically disappear from the tank.

The people who "disappear" oil from domestic tanks are not afraid of competition legislation

dastardly00

GalwayMagpie wrote: »

Thanks dastardly00,

Do you know if the complaints process anonymous? as in I don't want to order oil and then have it magically disappear from the tank.

There is info on their website about anonymity. I've never dealt with them or contacted them so I don't know how secure the info is kept.

Zzippy

Isn't it strange how the oil is imported through Galway, so with distribution/transport costs the price should be lowest here, and most expensive in places like Donegal, where it has to be transported a long distance by road...

Crumbs868

Zzippy wrote: »

Isn't it strange how the oil is imported through Galway, so with distribution/transport costs the price should be lowest here, and most expensive in places like Donegal, where it has to be transported a long distance by road...

Not as straightforward, it's actually cheaper for the local oil companies to transport oil from Dublin to Galway via road than it is to buy out of Galway as transporting by ship into Galway is so expensive.

Hence why there are so few oil artics operating out of Galway anymore - eg corrib oil have 10 trucks drawing oil out of Dublin 24/7 each day to the west of Ireland

And in relation to Donegal they would get all their fuel from Derry which has one of the largest and most modern fuel storage facilities on this island which was built only a few years ago

Not aimed at you but a sexy news story / conspiracy theory can usually fall to pieces once facts are introduced

Crumbs868

I'd also doubt there is an official cartel going on as they got into so much trouble the last time(director bans, a lot of court cases and jail threats). I'd say it's simply down to Galway not having an independent provider who will take on the large distributors and without this they are happy to match each other's prices rather than take each other on

Zzippy

Crumbs868 wrote: »

Not as straightforward, it's actually cheaper for the local oil companies to transport oil from Dublin to Galway via road than it is to buy out of Galway as transporting by ship into Galway is so expensive.

Hence why there are so few oil artics operating out of Galway anymore - eg corrib oil have 10 trucks drawing oil out of Dublin 24/7 each day to the west of Ireland

If it's so expensive to ship into Galway why are there tankers like Galway Fisher constantly on the Galway route? And where is the oil they're bringing in going?

Crumbs868

Zzippy wrote: »

If it's so expensive to ship into Galway why are there tankers like Galway Fisher constantly on the Galway route? And where is the oil they're bringing in going?

That's mainly Galway consumption and some smaller Mayo / Roscommon distributors who can't justify travelling to Dublin (anything south of Galway go to foynes). Majority of Mayo oil (petrol station and heating oil) comes from Dublin not Galway

Zzippy

Crumbs868 wrote: »

That's mainly Galway consumption and some smaller Mayo / Roscommon distributors who can't justify travelling to Dublin (anything south of Galway go to foynes). Majority of Mayo oil (petrol station and heating oil) comes from Dublin not Galway

So, it's economic to ship to Galway and sell oil for local consumption @ €310 a fill? But companies in Donegal can truck it from Dublin/Galway and sell it for €299? Sorry, I'm not having that. If it's cheaper for counties far from a port to transport from Dublin then there is zero point in shipping into Galway. Either that, or the Galway companies are creaming off extra profit and not being competitive. To paraphrase the OP, if it quacks like a duck...

corsav6

Kerosene prices in Mayo are the same, 310 for 500lt on corrib oil website and only 1 or 2 euro either side on other sites.
I rang our local corrib oil depot and was quoted 300 for 500lt so website doesn't reflect actual price.

Crumbs868

Zzippy wrote: »

So, it's economic to ship to Galway and sell oil for local consumption @ €310 a fill? But companies in Donegal can truck it from Dublin/Galway and sell it for €299? Sorry, I'm not having that. If it's cheaper for counties far from a port to transport from Dublin then there is zero point in shipping into Galway. Either that, or the Galway companies are creaming off extra profit and not being competitive. To paraphrase the OP, if it quacks like a duck...

Did you read my posts?

1. Donegal get their oil from Derry(large deep water fuel farm opened in 2006) so completely irrelevant and not a good example
2. Contrary to what one might expect Galway does not gain a price advantage from having oil ships deliver to its terminal due to the cost of travelling all around the coast of Ireland (most Galway oil comes from Wales) and the fact that the two oil ships serving Galway are really small by oil ship standards so not as efficient as other oil ships.

The main customer of Galway port is the local heating oil rigids and topaz themselves as they own it. The rigids avoid having to stockpile oil (and invest in the associated oil storage), risk oil price movements(being caught with 100k litres of kero when prices fall) and having to have sufficient artic capacity to deal with the peak consumption periods(dead during the summer v flat out at Christmas). So in general if an oil distributors rigid is out of range of Galway port and it has to be shipped to them via artic it's unlikely to be from Galway port

Here is proof, the 2 largest oil companies in Cliften do not get their oil from Galway port, the largest gets his from inver oil out of foynes and the second largest gets theirs from Dublin. So in fact they drive past Galway port!

And more proof (which you can check) half the oil artics who park in Galway port actually draw out of Dublin not Galway, so each morning they will drive out their gate empty and get a load in Dublin and drive back to Galway / Mayo with the load

As I said yes Galway have high prices however the reason for high prices in Galway is unlikely to be a cartel (which involves agreeing prices between each other) but rather a lack of REAL competition. Ie why bother lowering my prices if I know supplier x will just follow so instead I'll just match him and be confident that another supplier is not going to blow me out of the water with a much cheaper price. So yes I agree with you that Galway heating oil companies are likely making more profit but it's due to charging a higher price and nothing to do with Galway port

Don't forget how much trouble the last cartel investigation got everyone in. The wests largest oil company corrib oil were found guilty and the owners were barred from acting as company directors so if they are caught again it will be jail, this is the main reason I doubt a cartel exists. Cartels are risky and all it takes is one loud mouth which is what happened

Similar prices does not equal a cartel so go tell your duck

stampydmonkey

Good post crumbs.

GalwayMagpie

Crumbs868 wrote: »

Similar prices does not equal a cartel so go tell your duck

Good posts, I had a word with the duck and it said:


"In proceedings for an offence…it shall be presumed that an agreement between competing undertakings, a decision made by an association of competing undertakings or a concerted practice engaged in by competing undertakings the purpose of which is to-
a directly or indirectly fix prices with respect to the provision of goods or services to persons not party to the agreement, decision or concerted practice,
b limit output or sales, or
c share markets or customers
has as its object the prevention, restriction or distortion of competition in trade in any goods or services in the State or in any part of the State or within the common market, as the case may be, unless the defendant proves otherwise."

So you don't have to sit around a large table agree to fix the price, the absence of competition is grounds enough.