Petrol stations free to individually raise prices, says consumer watchdog

Ireland’s consumer watchdog has said there are “no legal barriers” to petrol stations independently increasing prices and it does not have a role in monitoring such increases.

The statement from the Competition and Consumer Protection Commission (CCPC) comes after politicians called for it to investigate alleged price-gouging by fuel companies.

Excise cuts of 20 cent per litre of petrol and 15 cent on diesel kicked in from midnight as part of Government efforts to mitigate a sharp increase in fuel costs linked to the war in Ukraine.

However, there have been claims that some fuel providers hiked prices just before the excise cut as well as suggestions that prices are still rising.

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Government and Opposition politicians have called for a CCPC investigation.

The CCPC indicated, though, that it requires evidence of cartel behaviour before it would launch an investigation.

In a statement it said that “there are no legal barriers to petrol stations acting independently to increase their prices”.

“The CCPC does not have a role in monitoring price increases in the market.

“If businesses collude to fix prices this is cartel behaviour and the CCPC can investigate and refer a case to the DPP for criminal prosecution.”

It said further information on cartels and how the public can submit evidence to the CCPC is available on its website.

In a subsequent statement the organisation said said it had received 33 contacts in relation to the pricing practices of service stations since the start of 2022 and 29 of these have been received in the last 48 hours.

“Of the 33, 27 contacts relate to pricing practices by service stations and refer specifically to increases in the price of fuel,” it said.

“These contacts have been forwarded to our Competition Enforcement and Mergers Division where they will be examined as part of the complaint screening process.”

Earlier, the Minister of State for Consumer Protection Robert Troy encouraged people to report any evidence of cartel behaviour.

He said his officials are working with the CCPC to ensure consumers are aware of their rights and businesses are aware of their obligations.

“If any consumer has evidence of cartel behaviour or abuse of dominance with regards to high fuel costs, they should contact the CCPC who can investigate,” Mr Troy added.

Representatives of the sector said it could be a number of days before the cut in excise is reflected in the price at the pumps.

Kevin McPartlan, chief executive of industry body Fuels for Ireland, said the reduction in excise has had "some impact" but it won't be felt by many just yet.

“Excise is payable at the point at which they leave the terminal and it’s paid in advance a lot of the time. So the fuels stored in the forecourts, and being used today, had already paid the higher rate of excise,” he said. “They have to get rid of the stock they bought at the higher excise before prices come down.”

Mr McPartlan denied claims that filling stations were price-gouging or profiteering ahead of the excise reduction, adding that the allegations were “so far from the truth”.

Further increases expected

Anna Cullen, spokeswoman with AA Ireland, said some filling stations had dropped prices but that it was “mixed” overall and up to individual forecourts to decide.

However, Ms Cullen said even if prices come down in the coming days, these would still be among the highest since the AA began recording data in 1991. She said she expected further increases in the weeks ahead.

Laois-Offaly TD Barry Cowen has written to the CCPC saying he is concerned some retailers may be engaging in "price gouging".

“Photos have been shared on social media of the high cost of petrol and diesel per litre, with assertions being made that the cost increased dramatically overnight – sometimes apparently by the sum of the planned Government reduction in excise duty,” he wrote.

A spokeswoman for Applegreen service stations welcomed the temporary reduction in fuel excise duties, but said they “do not go far enough to mitigate completely the cost price increases we have experienced as a result of unprecedented volatility in the wholesale fuel market”.

Separately, in a statement issued to The Irish Times, Circle K denied it was artificially inflating prices at any of its forecourts around Ireland in order to take advantage of the excise cuts.

“We categorically refute claims that price changes across petrol and diesel were implemented as a result of [THE]Government announcement regarding the reduction in excise duty,” a spokesman said.

“Our pricing is set in line with local and international market movements and wholesale market costs. This was the case today and the same process is adhered to anytime there are price changes,” he continued.

He stressed that the current climate was ‘unprecedented” and stressed that the Russian invasion of Ukraine was having a “significant impact and leading to price pressures which is a challenge for all fuel retailers.”

He said Circle K was “continuously focused on delivering the very best value for our customers, however the current level of volatility within global markets driven by intense demand is posing a major challenge for everyone in the sector”

The company’s spokesman concluded by saying Circle K was committed to passing on any reductions to the cost of refined petrol and diesel products globally although he warned that it was likely there would be further “pressure on prices in the coming weeks”.

‘Immediately eroded’

Speaking in the Dáil on Thursday, Minister for Transport Eamon Ryan said the Taoiseach was working with EU colleagues at a summit in France on the issue of taxes on energy in an attempt to find ways to help consumers handle rising fuel costs.

The Minister was responding to Sinn Féin deputy leader Pearse Doherty, who called for further cuts to excise duties. Mr Doherty said the reduction announced by the Government had been “immediately eroded” and that “prices are going to continue to go up and up”.

“You need to understand that people are panicking and they need support from Government,” Mr Doherty said.

Mr Ryan acknowledged people were “very upset” this morning, as they were looking at forecourts and seeing that the price of petrol and diesel had not changed. The problem, he said, was that this price was probably set when fuels were bought ahead of the excise reduction.

Mr Doherty also said that people “don’t need to be told to slow down, they’re telling you hurry up, get your act together and get these prices down further”. This was a reference to Mr Ryan on Wednesday saying people should drive more slowly as a practical step to reduce their fuel consumption.

On Thursday, The Minister said: “That advice to slow down got a lot of criticism yesterday, but it was an answer to a straight question; what are the sort of efficiency measures we could do and it’s just a fact.”

Mr Ryan said if a person travelling on a motorway went from 120 km/h down to 100km/h they could save “about 20 per cent plus”. “That’s real, that’s absolute law of physics and that measure is also important.”

Speaking in the Dáil, Fine Gael TD Fergus O’Dowd called for “dawn raids” on fuel companies. He said petrol dealers are challenging the authority of the Government “by not passing on the full discount in many cases to consumers”.

He also said the public “need to flood the CCPC with complaints because they will only act if they have those complaints”.

Social Democrats TD Jennifer Whitmore said she had written to the CCPC asking it to launch an investigation.