AA say no evidence of any oil price-fixing in filling stations

Date Published: 25-Feb-2013

The Automobile Association has said there is no evidence whatsoever of price-fixing amongst filling stations in Galway City.

Spokesman Conor Faughnan said that while prices on forecourts “move up and down like line dancers”, there is nothing to suggest collusion amongst operators.

And he said that a price difference of up to 8c per litre between the city and county areas “should balance out over time”.

“It is something you notice, not just in Galway, but in relatively tight urban areas [similar pricing]. Is there anything sinister going on? It would be very difficult to allege that. To be realistic, there is no smoking gun.

“You will have week-to-week anomalies caused by the delivery cycle. In a country area, there might be one delivery every 10 days and you may have two a week in the city. But over a longer-term, those prices should average out though.

“Busier stations will move up and down faster, but over time, you shouldn’t see remote areas being cheaper than urban areas.

“We’re not aware of any smoking gun evidence in Galway City.

Often the explanation [in price similarities within the city, and disparity with the county] is not sinister. Local garage operators may not be free to set their prices,” said Mr Faughnan.

He said that in defense of many filling station operators, they are tied into supply contracts and generally make around 4c on a litre of fuel.

Last year, a major investigation by the Competition Authority ruled out any evidence of price fixing or cartel activity in Galway, on foot of a “huge volume” of complaints.

Their investigation looked at price surveys, interviews with filling station employees and the Authority also met with senior management of three of the main wholesale oil companies – who account for 40% of filling stations in the country.

According to the findings of the investigation: “The price surveys and follow-up discussions with complainants revealed that while prices may follow each other for a period of time, this pattern does not always continue over the longer term.

“Before opening a criminal investigation we need sufficient evidence to suspect that filling stations or other companies further down the supply chain have entered into pricing agreements or that more informal concerted practices exist.

“Most complainants state that motor fuel prices are identical in a number of locations throughout the State. Parallel pricing is not a breach of the Competition Act and it is not unique to the motor fuel market,” the investigation report reads.