Market research on the fuel market

Breytingar á eldsneytismarkaði – skýrsla nr. 2/2020

The Competition Authority has published Report No. 2/2020 , Breytingar á eldsneytismarkaði – úrlausn samkeppnishindrana sem bent var á í markaðsrannsókn Samkeppniseftirlitsins. Í skýrslunni eru rifjaðar upp samkeppnishömlur sem fjallað var um í frummatsskýrslu vegna markaðsrannsóknar eftirlitsins sem birt var í lok árs 2015 (2/2015) , and an account is given of the changes that have occurred as a result of, or in connection with, that research.

Since the Competition Authority presented its preliminary assessment and suggested ways to remedy the situation, it has issued four opinions to the government, recommending measures to address conditions that are detrimental to competition. Furthermore, companies in the market have taken and committed to changes in connection with subsequent administrative proceedings, in line with the Authority's preliminary assessments in those cases, which are aimed at facilitating competition. In this regard, the following opinions, decisions and settlements may be mentioned:

1. Opinions No. 1/2017 and 2/2017 – Restrictive practices in the fuel market, in which recommendations were made to the Minister of the Environment and Natural Resources and the City of Reykjavík to improve the framework for planning and land allocation. The recommendations have not been acted upon.
2. Opinions No. 3/2017 and 4/2017 – Restrictions on competition in the fuel market, in which recommendations were made to the Minister of Transport and Local Government and the Transport Equalisation Fund to amend the fund's framework. The recommendations were acted upon.
3. Decision No. 8/2019, Merger of N1 hf. and Festi hf, where the merging parties committed themselves m.a. the sale of petrol stations in the capital region and the 'Dælan' trademark to a new party, and changes to the framework for fuel procurement and distribution, both of which are intended to enhance competition.
4. Decision No. 9/2019, Merger of Haga hf., of Haga hf., Olíuverzlunar Íslands hf. and DGV ehf., in which the merging parties undertook, among other things, the sale of petrol stations in the capital region to a new party and changes to the framework for fuel storage and distribution.
5. Settlement of Olíudreifing (ODR) with the Competition Authority regarding increased access for resellers to wholesale fuel and increased access to the services of Olíudreifing ehf. The settlement was made in connection with the resolution under points c and d above.
6. Decision No. 39/2020, Improved competitive conditions for the sale of aviation fuel at domestic airports, where a settlement for the case ensures equal and objective access to the sale of fuel at domestic airports.

It has now been ensured that there is fair and objective access to the facilities of Icelandic Tank Storage ehf. in Helguvík for the sale of aviation fuel. These solutions are discussed in more detail in the report.

In light of the above, there have been significant changes in the fuel market since the market study was conducted. These changes are likely to facilitate competition in the market, although it is not yet clear what their ultimate impact will be. In the opinion of the Competition Authority, these reforms are likely to facilitate the development of energy markets and create a more efficient framework for the forthcoming energy transition. In this area, there are various challenges that the Competition Authority is considering.

During the market investigation, it was not necessary to apply intervention pursuant to subsection 1(c) of Article 16 of the Competition Act, which authorises the Competition Authority to intervene in situations that hinder competition, even if they are not attributable to breaches of competition law. It is positive that changes have occurred in the market without it being necessary to resort to that provision.

Videos and interviews with international experts and domestic stakeholders

Video – The meeting in its entirety

Video – Guðrún Ragnarsdóttir, Chairperson of the Competition Authority –

Videos – Frosti Ólafsson, Hermann Guðmundsson, Johannes Gunnarsson, Tryggvi Axelsson

Here, Frosti Ólafsson (Managing Director of the Business Council), Hermann Guðmundsson (Managing Director of KEMI), Jóhannes Gunnarsson (Chairman of the Consumer Association) and Tryggvi Axelsson (Director of the Consumer Authority) answer the following questions.

• Why is the price of vehicle fuel higher here than almost anywhere else?
• Are competitive considerations given sufficient weight in local authority planning? 
• How can competition in the fuel market be increased? 

Video – Helstu niðurstöður frummatsskýrslu Samkeppniseftirlitsins um eldsneytismarkaðinn.

Video – Samantekt á sjónarmiðum hagsmunaaðila um aðgangshindranir og samhæfða hegðun á eldsneytismarkaðnum.

Video –  Samantekt á sjónarmiðum hagsmunaaðila um verðsamanburð, álagningu, arðsemi og mögulegar úrbætur á eldsneytismarkaðnum.

Video –  Samantekt viðtala sem Samkeppniseftirlitið tók við forstjóra þýska samkeppniseftirlitsins, forsvarsmenn breska og portúgalska eftirlitsins og Severin Borenstein, prófessor í hagfræði við Berkley háskóla.

Video – Panel I

Video – Panel II

Video – Final words of Páll Gunnar Pálsson

Open meeting

Agenda

The meeting in its entirety – Video

Guðrún Ragnarsdóttir, Chairperson of the Competition Authority – Video

Please register for the conference by sending an email to samkeppni@samkeppni.is

You can take part in the preparation for the meeting by submitting questions for a panel discussion. Please send them to samkeppni@samkeppni.is

(Posted online 12.09.2016)

Here, Frosti Ólafsson (Managing Director of the Business Council), Hermann Guðmundsson (Managing Director of KEMI), Jóhannes Gunnarsson (Chairman of the Consumer Association) and Tryggvi Axelsson (Director of the Consumer Authority) answer the following questions:

• Why is the price of vehicle fuel higher here than almost anywhere else?
• Are competitive considerations given sufficient weight in local authority planning?
• How can competition in the fuel market be increased? 

Jóhannes Gunnarsson, chairman of the Consumers' Association

Frosti Ólafsson, Director General of the Business Council 

Hermann Guðmundsson, CEO of KEMI 

Tryggvi Axelsson, Director of the Consumer Authority

Below you can find documents and other information that the Competition Authority has published in connection with the investigation.

General information about market research

• Reglur um markaðsrannsóknir Samkeppniseftirlitsins nr. 490/2013 (8. 5. 2013)
• Umræðuskjal nr. 2/2012 Markaðsrannsóknir Samkeppniseftirlitsins (3. 2. 2012)

Research plan

• Rannsóknaráætlunin (5. 6. 2015)

The preliminary assessment report

• Spurningar og svör vegna frummatsskýrslu (2.03.2016)
• Þriðji hluti frummatsskýrslu, frummat og mögulegar úrbætur (30.11.2015)
• Ágrip frummatsskýrslu (30.11.2015)
• Frummatsskýrslan á pdf formi (30.11.2015 -uppfærð 22.12.2015)
• Annex A.1 Definition of geographical markets 
• Appendix A.2 Cost-benefit analysis
• Appendix A.3 Supply Area Analysis of Fuel Stockpiling
• Appendix A.4 Supply Area Analysis of Retail Alternative Fuels
• Appendix B.1 Development of retail market share
• Appendix B.2 Market share in inventory holding
• Vidauki-B.3 Neytendakonnun á meðal einstaklinga
• Appendix B.4 Consumer survey among businesses
• Vidauki-B.5 Management and Ownership Relationships                                                                    
• Appendix C.1 Conforming Behaviour
• Appendix C.2 Price Leadership Analysis
• Appendix C.3 Asymmetric truth-telling
• Appendix C.4 Description of the oil companies' discount arrangement
• Appendix C.5 Official Competition Hams
• Annex D.1 Opinion on the transfer of non-oil products

Views received regarding the preliminary assessment report

• Alþýðusamband Íslands  (16.3.2016)
• Atlantsolía (16.3.2016)
• Festi (16.3.2016)
• Félag íslenskra bifreiðaeigenda (16.3.2016)
• Fljótsdalshérað (16.3.2016)
• Flutningsjöfnunarsjóður (16.3.2016)
• Gildi (16.3.2016)
• Icelandair (16.3.2016)
• National Association of Pension Funds (16 March 2016)
  • Landssamtök lífeyrissjóða – fylgiskjal  (16.3.2016)

• Lífeyrissjóður starfsmanna ríkisins (16.3.2016)
• N1 (16.3.2016)
• Neytendasamtökin (16.3.2016)
• Neytendastofa (16.3.2016)
• Olíudreifing (16.3.2016)
•  Oil Trading of Iceland (16 March 2016)
  • Olíuverzlun Íslands – fylgiskjal (16.3.2016)

• Orkustofnun (16.3.2016)
• Reykjavíkurborg (16.3.2016)
• Samtök atvinnulífsins (16.3.2016)
• Samtök verslunar og þjónustu (16.3.2016)
• Skeljungur (16 March 2016)
  • Skeljungur – attachment (16 March 2016)

• Umhverfis- og auðlindaráðuneytið (16.3.2016)
• Viðskiptaráð (16.3.2016)

Participation in public debate

Hringbraut: Director-General of the Competition Authority – Billion-pound consumer losses due to collusion by the oil companies? (11.12.2015)

The Mirror RÁS 1: Price controls a last resort if measures fail. (01.12.2015)

RÚV News Agency: The price of fuel is very important to consumers. (30.11.2015)

Society CHANNEL 1: Coordination of the oil companies not necessarily illegal. (30.11.2015)

Bylgjan – Reykjavík in the afternoon: Not proof that anyone has done anything wrong. (30.11.2015)