Bulgarian Commission for Protection of Competition commences an investigation in the petrol sector

Bulgaria

The Bulgarian Commission for Protection of Competition (CPC) has initiated an investigation into potential infringements by one of the largest oil refining enterprises in the Balkans, and a number of tax warehouses, oil distributors and petrol stations operating in the country.

The CPC is probing potential abuse of a dominant position and cartel infringements in the market. The suspects have allegedly committed infringements over the prices of mass motor fuels along the production/import, storage, wholesale and retail chains.

The CPC initiated the proceedings after receiving information from the Supreme Administrative Prosecution Office about discrepancies between the significant fall in the price of crude oil worldwide (47.4% according to the Bulgarian Customs Agency) in March, and the 11% decrease in the retail prices of motor fuel in Bulgaria during the same period. The signal from the prosecutor's office was accompanied by a Customs Agency analysis of the national fuel market for two periods in March and early April 2020.

The CPC’s preliminary analysis revealed that the decrease in the average retail prices of petrol and diesel gradually follows the decrease in the average prices of fuels when released for consumption from tax warehouses. Nevertheless, there are public concerns that the decrease has not been in line with the significant fall in crude oil prices globally and is the result of anti-competitive practices in the sector.

Next steps: As part of its investigation, the CPC is authorised to request the following from the concerned companies and third parties: evidence on paper and electronic carrier and verbal or written explanations in response to specific questions. Investigators will also seek out expert opinions and may perform dawn-raid inspections. 

If the analysis of the CPC shows that any of the companies in the petrol distribution chain had kept their prices high for long periods of time and failed to react in a timely fashion to the changes in the input costs of fuels, the CPC could accuse these companies of infringing competition rules. Each of the accused companies will be entitled to submit written objections and to present a defensive thesis in open hearings before the CPC.  

Those involved in cartels can consider the option of applying for leniency. If the CPC finds an infringement of competition rules, it may impose a fine in the amount of up to 10% of the aggregate annual turnover of the infringer in Bulgaria for the previous financial year. The CPC's decision can be appealed to the Supreme Administrative Court.

As dawn raids by competition authorities are becoming more and more common, CMS has launched a free mobile application that provides guidance for competition-law dawn raids in 27 countries, including Bulgaria. The CMS Dawn Raid Assistant provides simple and easy-to-follow instructions, which can be referred to and checked during a dawn raid, and immediate and real-time assistance by CMS experts. For more information about the CMS Dawn Raid Assistant, click here.

For more information on the CPC's proceedings and its potential impact on your business, contact your regular CMS source or local CMS experts: Nevena Radlova and Anna Tanova.

The article is co-authored by Kalina Krastanova.