Final Report on the In-depth Analysis of the Liquid Fuel and Bottled Gas

The Competition Authority has concluded its In-depth Analysis of the Liquid Fuel and Bottled Gas Sectors, in accordance with the deadline of 31 March 2009 stipulated in the time schedule. The president of the Competition Authority will present the final report first-hand to the Parliamentary Committee on Economic Matters, Innovation and Regional Development (CAEIDR) at a hearing arranged for 21 April. For this reason, the report will only be released on that date.

The In-depth Analysis of the Liquid Fuel and Bottled Gas Sectors, an initiative of the Competition Authority, corresponds to the need to give greater depth to the regular monitoring of the fuel market in Portugal.

The analysis commenced in July 2008 with a request for additional data to be supplied by the various entities involved in these sectors: the oil companies operating in Portugal, sector associations, relevant public bodies and enterprises, port authorities, motorway concessionaire companies, fuel storage companies, and bottled LPG retailers.

The information requested included not only the operating conditions in the market, i.e. the various phases of the vertical chain from refining/importation to the retailing of liquid and gaseous fuels, but also structural factors that condition the sector and the contractual relationship between those taking part in the market. This In-depth Analysis of the Liquid Fuel and Bottled Gas Sectors has already produced an Interim Report, which was similarly presented first-hand in the CAEIDR hearing of 16 December 2008.

At an earlier stage, in June 2008, the Competition Authority had also carried out a study of the Fuel Market in Portugal, at the request of the Minister for the Economy and Innovation, in compliance with the Competition Authority's statutes. This allowed it to clarify, among other issues, the formation process for the selling price of petroleum and diesel fuel to the public and its relationship with the development of international crude oil prices (Brent crude in London), refined oil products (Platts, Rotterdam) and the euro/dollar exchange rate.

The document to be presented on 21 April will therefore be the last of the three reports produced by the Competition Authority to analyse the behaviour of the fuel market in Portugal following the oil shock in 2008.

This Final Report not only complements the analyses carried out in the Interim Report of December 2008 and the report of June 2008 but also provides a structural description of the liquid and gaseous fuels sector in Portugal, in particular in terms of the storage and transport of products and the location and description of public filling stations; at the same time, it identifies and assesses the main topics relating to competition. It also analyses the asymmetries in the hiatus in, and the size of, the adjustment between liquid fuel retail prices and the raw material prices on international markets, in greater depth than in the Interim Report of December 2008.

With this Final Report, the Competition Authority will be, to date, the only competition authority in the European Union and the OECD to have concluded an in-depth analysis of the impact of the 2008 oil shock on the domestic market for liquid fuels and bottled gas. It is possible that reports by other competition authorities will be published shortly, though none has hitherto announced a definite date for doing so.

(Nº: 6/2009)