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.
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
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
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
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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.