Fin24

Oil giants charged with price-fixing

2012-10-24 14:35

Johannesburg - The Competition Commission said on Wednesday it had brought charges of price-fixing against the local units of major oil companies including Chevron, BP and Total.

The Commission also said in a statement the companies - as well as Shell, Sasol [JSE:SOL] and Engen - had shared detailed information about sales and customers to hinder competition.

The suspected collusion ran from the late 1980s to 2005 and included petrol, diesel, illuminating kerosene and other products, the commission said.

“Information at this level of detail allowed the oil companies to closely track each other’s sales and to align their strategies in the market, eliminating competition between themselves,” the commission said.

“This also enabled them to divide or allocate markets by deciding not to enter, or compete for, certain geographic markets or customer groupings,” it said.

The commission said it had asked South Africa’s Competition Tribunal, which rules on such cases, to levy a fine equal to 10% of company revenue in the preceding financial year.

 

Comments
  • ssegaetsho - 2012-10-24 14:49

    No ishhh.

      elgh.elgh - 2012-10-25 08:20

      Same old story, they will get a massive fine but the consumer still pays the same price.

      leon.laubscher.58 - 2012-10-25 09:45

      They will pay a massive fine which will probably result in petrol prices increasing to make up for the lost revenue. It's a lose lose situation. We can never win against these oil companies. Time to stretch these legs of mine and put them to good use

      nicholas.graan - 2012-10-25 12:03

      Judging by the soft fines issued by the Competition Commission in the past I doubt these oil companies will be losing much sleep over this.

      hugh.olphart - 2012-10-25 15:25

      Nick, 10% of annual turnover for an oil company isn't chicken feed. Your talking Billions.

      nicholas.graan - 2012-10-25 19:34

      I hope you would be right Hugh, however I doubt they would enforce the full penalty of 10%. The last "big one" was Tiger Brands who were fined 5.7%, they paid this off in one shot and within two weeks they put the price of bread up. 5.7% for ripping off the poor? What do you have to do to get fined 10%?

      arthur.hugh - 2012-10-25 20:28

      Who's pocket does that fine money go to, that's what I'd like to know.

      nicholas.graan - 2012-10-25 22:21

      It goes straight to Treasury. It should be distributed amongst different charities so that at least the public who were ripped off in the first place can get their money back, albeit in an indirect way.

  • jonathancfarrell - 2012-10-24 14:51

    Constantly these price fixing cases are brought up yet the prices never come down!

      mattewis.kat - 2012-10-25 07:18

      They'll just be fined and the proceedings fed into the gravy train! Even the "poor" are now starting to realize that their angelic "freedom fighters" don't give a rats @ss about them!

      john.loveland.9 - 2012-10-25 14:26

      And here we all thought the government fixed the prices. This is a jockeying for market share which is a normal business practice. I have a problem with SASOL who's products are sold at international prices and yet it is produced at a lower price... from equipment which was bought with your and my tax.

      michal.mierzwa - 2012-10-26 11:48

      Its all got to do with GREED & CONSUMERISM

  • J.Stephen.Whiteley - 2012-10-24 14:55

    There should be competition between all petrol companies, but I believe when Pick 'n Pay wanted to sell petrol they were prevented from doing so by the government. Kathy

      gordon.turner.37 - 2012-10-24 15:53

      actually government fixes the petrol price and world markets dictate the oil price. Tracking sales is what competitors do when they are COMPETING. Check out the price of a air tickets across airlines to see what prices look like in a competitive market... they are the same!!!

      andrez.kolesky - 2012-10-24 16:22

      @J.Stephen. I remember the ramifications of that case. Pick and Pay Boksburg Hypermarket.

  • kenpeg.dawson - 2012-10-24 14:56

    Good news, Fine them a couple of BILLION and pay the money into the equalisation fund and let all motorists get something back.

      robbie.crouch - 2012-10-24 16:18

      Fine Government for fixing prices then.

      mike.bundy.73 - 2012-10-25 08:39

      Make them pay for eTolls

  • stirrer.stirrer - 2012-10-24 14:57

    What happens to the fine? Does it land in government coffers just to end up lining some politician's pocket? Here's a suggestion: Let the companies drop their pump price by 10% for the next year. Then the fine lands up where it belongs - the consumer's pocket.

      linda.horsfield.77 - 2012-10-24 15:15

      Brilliant suggestion! But the thieves in power will never allow something where they cant get a piece of the pie.....

      vincent.mafooa - 2012-10-24 15:40

      Good point but not in the world we live in, yes they could be fined for price fixing but the price of petrol wont go down even though findings confirmed that there was price fixing taking place, remember the price fixing by companies that make and sell bread, your Albany, Sasko and others? well after they were found to have fixed the prices and being fined for it, the price of bread never went down, it stayed to the price which they fixed it to, so basically it's gonna be the same thing with this scandal.

      anton.coetzee.5 - 2012-10-24 16:44

      Agree, Sasko Bakeries dropped the bread price after it was caught.

      beverly.young3 - 2012-10-25 06:27

      There is something in the back of my mind from a few years ago. I am sure it was Tokyo Sexwale ....let me think. It had to do with his involvement in Shell? Anyway, it was about percentages. I am going to google it. I know this aspect does not show up on his portfolio of investments. Which goes to show that there is no free market at all, and many fat cats are involved. It is going to worry me until I find it now. Look he might have gotten rid of this now, but a figure of 7% was bandied about.

  • krispin.davies.9 - 2012-10-24 14:58

    So, who gets the money?

  • Ze Don - 2012-10-24 15:01

    Yet it's the government that sets the fuel price... Isn't it therefore the government that is guilty of price fixing?

      robbie.crouch - 2012-10-24 16:18

      Exactly!

      Rational100 - 2012-10-24 18:23

      Actual that's not true...the elephant is in the other room. If I had enough time, resource and security, I could unpack that for u!!

  • andynct - 2012-10-24 15:06

    All those companies are selling Diesel and Petrol at the same prices. That's definitely price fixing!

      kenpeg.dawson - 2012-10-24 15:17

      They set the base price, cANCer adds their portion in taxes duties excise road fund accident fund and whatever else then gov sets pump price.

      ian.mather.56 - 2012-10-24 16:13

      Andy the petrol price is fixed by the government and the retail diesel price differs from fuel station to fuel stataion by as much as 0.70 cents per litre. So I don't buy the theory of price fixing in this case.

      piet.snot.77964 - 2012-10-25 17:12

      Sorry but the price of petrol is REGULATED do you understand! So was DGO (diesel gas oil) for along time as well. If you look around you can find different prices for diesel and the range is quite big.

  • rowan.maulson - 2012-10-24 15:07

    How exactly could they "price fix" things like Petrol which are regulated by the government?

      om.nom.nom.01 - 2012-10-24 15:46

      Before the price even gets to government, O.P.E.C. simply gets together & decides how many barrels they are going to produce thereby making them a global price fixing conglomerate (that nobody can do a thing about).

  • ian.mather.56 - 2012-10-24 15:13

    This it seems is more a case of information sharing than actual price fixing. The oil price is determined internationally and the government sets the price for all fuels and related products. So what are they hoping to achieve with this ??

      robbie.crouch - 2012-10-24 16:20

      I cannot for the life of me see how this can be seen as "price fixing" all they were doing was trying to share the limited pie the government gave them.

      Rational100 - 2012-10-24 17:59

      @ian.. There are some significant price build-up components beyond the refinery gate price that are influenced/fixed locally either directly or indirectly through such collusive action. Geographical market apportionment and zoning is a classic example of such..

  • sven.gohre - 2012-10-24 15:15

    As the fuel price is set by the government, as well as the profit margins, how can the individual companies now be charged with price fixing? When Raymond Ackerman tried to sell petrol cheaper at his Pick & Pay garages, he was stopped by government and not by the other oil companies. It would seem that the CancER is running out of easy money and are now targeting "Soft" touches, which will be popular due to the fact that the fuel prices are soooooo high.

  • ian.naidu - 2012-10-24 15:38

    screw the fine, reduce consumer costs as a penalty!

  • JamesMWood - 2012-10-24 15:41

    Don't just fine them, make them reduce the price so the consumer also wins

  • Daniel Mah - 2012-10-24 16:00

    the market is regulated, no such thing as price fixing - just sharing/dividing market share

  • robbie.crouch - 2012-10-24 16:17

    Well as those prices were determined by GOVERNMENT how the heck can we believe this allegation? If fuel was deregulated we may see real competition as well as a fall in price...

      piet.snot.77964 - 2012-10-25 17:18

      Robbie - Maybe not a fall in price - when other countries deregulated the price increased in many cases - what happens to the out of the way towns where there is only one service station - you are going to pay big time if you run low there!

  • ljmostert - 2012-10-24 16:20

    Their profit margins should be investigated. Government should deregulate!

  • konstabel.koekemoer - 2012-10-24 16:28

    This does not make much sense, how can there be price-fixing when the retail price of petrol and the wholesale price of diesel are regulated? So oil companies are not allowed to discount petrol and can only influence the diesel price by a small margin. This action will not result in any drop in the fuel price so it is a waste of time and money.

  • gareth.coats - 2012-10-24 16:44

    This is such a joke and smacks of blatant money-grabbing! The government has fixed / regulated the price of fuel, and international markets effectively determine the price of oil to customers. Laughable - but I will watch this closely.

  • tilovonbrandis - 2012-10-24 17:30

    Before America invaded Iraq, the oil price was around $6 a barrel. Now the oil price is mostly above $100 a barrel. The total profit by the oil industry last year, a whopping $130 BILLION!!!

      Rational100 - 2012-10-24 18:11

      The actual price of a barrel of crude to local refineries is deemed / based on assumed finished product landed in Durban rather than the actual price-Abnormal Profits therefore are made off-shore even before the crude is refined by simple forward purchase deals at prices far below the deemed landed price. This is where the great conspiracy lies.

      Fidel - 2012-10-25 11:13

      Some scumbag in the City of London wakes up and decides what the price will be for the day, that is where we should look! The supply and demand principle is the biggest hoax!

  • Paulnicomp - 2012-10-24 17:35

    This is nonsense you cannot have anti-competitive behavior in an environment where competition is prohibited by law. I have seen letters to service station owners threatening that the department of Energy Affairs / minerals will prohibit Chevron from supplying the service station unless the owner stopped giving his customers free car washes as an inducement to purchase petrol

      Rational100 - 2012-10-24 18:04

      In most instances, this is meant to curb the required increase in retailer margins as volumes migrate from old to new service stations rather than demand growth. Remember, the retail margin is based on a return on asset formulae that flattens out the more service stations are opened at a faster rate than actual volume demand growth.

      piet.snot.77964 - 2012-10-25 17:21

      Rational100 - At least there is one person writing some sense on this matter - pity the rest don't read what you have to say.

  • hugh.robinson.56 - 2012-10-24 18:56

    What is the difference between price fixing on these lines and monopoly such as Eskom controlling prices to suit their lifestyle? Why does the competition board look within.

  • johan.vanheerden.12 - 2012-10-24 20:14

    JamesWood: Gov determines the price of fuel, how can they lower it. Gov take about R5 per liter and will go up next budget. The fixing bs is just to get money in they lost through the strikes. Engen sell their fuel in Lesotho for less than here because our Gov takes more

  • enda.rochford - 2012-10-24 20:18

    A 10% fine? Guess the price of your petrol is going to increase by roughly 10% this year for some unknown reason....

  • kseyffert - 2012-10-25 05:43

    And this in an industry where the Government sets the price at the till????? Seriously? These players can not compete as the Government sets the price and the profit margin. It only makes sense to co-operate seeing that it is impossible to compete. Really!

  • mzakes.matabata - 2012-10-25 09:58

    Seems like nobody here actually understand what is happening here, "Information at this level of detail allowed the oil companies to closely track each other’s sales and to align their strategies in the market, eliminating competition between themselves,” So if there is no competition between these company's than they can set prices to what ever they want right? that is price fixing.

  • petrivoges - 2012-10-25 10:12

    Same story as with Sasko and the price fixing. We already paid for it and will not be reimbursed. The fine gets paid and we still receive no benefit from this process.

  • pierre.basson.94 - 2012-10-25 10:25

    Who get the rewards from the Penalty - not the consumer that got ripped off

  • jim.dickson2 - 2012-10-25 11:02

    Petrol prices are regulated. So any turnover from petrol sales would have to be excluded. That leaves diesel, regulated at wholesale level and then the gasses and bitumen products.....

  • Fidel - 2012-10-25 11:09

    In China, these greedy scumbags would have been executed. There is something inhumanely wrong with the psychopathy and pathology of capitalism!

  • odupreez - 2012-10-25 11:18

    What are the guys at the competion commision smoking, the price is fixed by government, how can there be competion ?, the filling stations don not determine their own prices to attract more customers, are not allowed to have competions for say most pertol purchased etc, or discounts. The only company that should be charged with price fixing is the government, and maybe Sasol who produce fuel at .30c to .40c per litre and are responsable for at least 33% of the fuel used in the country.

  • cameron.briceland - 2012-10-25 11:27

    Excellent news..I will be consulting with my attorney and summonsing someone.I am going to make it hurt this time.

  • browne.howard - 2012-10-25 12:37

    Get real people - The South African goverment every month set a price for petrol, deisel and other products - so who is the Major Player in the "Fixing" of the prices

  • peter.lantz1 - 2012-10-25 13:43

    The only way that this will change, is if the Suits do some time, as well as Personally, pay a large fine!

  • nathanplove - 2012-10-25 14:17

    Who would be the beneficiary of this penalty and will it be filtered down to the public? I quess the bread price came down a few years back!Could be another form of taxation.

  • asadpat - 2012-10-25 14:29

    Let the Consumer have the benefit of this shameful excercise! Drop the Petrol price by 10 % at these Retailers.

  • Andrea - 2012-10-25 14:44

    and I think the ANC took over where they left off in 2005.

  • LanfearM - 2012-10-25 15:31

    Is anybody suprised by this? Always that the OPEC is the biggest conspiracy out there.

  • marius.vorster.31 - 2012-10-25 15:46

    Let them foot the capitalisation bill for e-tolling

  • anthonie.vanbosch - 2012-10-25 16:24

    It does not matter how many legislation, regulations and prescriptions the world and countries are issuing annually, people are ignorant, reckless and negligent. They just do not care! It is time these companies really start paying UP !!!

  • gary.dalton.75286 - 2012-10-25 16:35

    Bliksems!!

  • Tony.Montana.Moelenyane - 2012-10-25 17:00

    U might b surprised 2 find out that the evident files regarding this crooks a are @ our own Zuma.

  • ken.rowe.509 - 2012-10-25 18:41

    They pay the fines and still pocket millions. The ceo's should go to jail, that will make them think twice.

  • ikeraam.kellerman.9 - 2012-11-30 19:12

    Oil price fixing is actually economic genocide or oppression to the so called Coloured consumers which is the onwer of this country, therefore these oil companies should repay them back and also compensate then in a form they remove their stations out of their communities and assist establish new stations that belongs to the communities in order to use profits to empower the entire community and residents and the consumers

  • pages:
  • 1