The London offices of petrol giants Shell and BP have been raided by European regulators investigating allegations the pair may have worked together to rig oil prices for more than a decade.
The “unannounced inspections” were carried out at a number of oil companies based in London, Norway and the Netherlands amid allegations they “colluded in reporting distorted prices to a price reporting agency [PRA] to manipulate the published prices for a number of oil and biofuel products.
“Furthermore, the Commission has concerns that the companies may have prevented others from participating in the price assessment process, with a view to distorting published prices.”
If Shell and BP have indeed reported false prices to price reporting agencies, this will likely have had a huge impact on the prices consumers pay for fuel. Prices assessed and published by PRAs serve as benchmarks for trade in the physical and financial derivative markets and even small distortions of assessed prices can have a huge impact on the prices of crude oil and the petrol and diesel sold in petrol stations.
If Shell and BP are found guilty of collusion to distort prices, they may be found to be in violation of European antitrust rules designed to prohibit cartels and businesses taking advantage of a dominant market position.
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, despite fuel retailers complaining that there seemed to be no explanation for spikes and dips in the price of petrol.
The investigation is ongoing.