Romanian Competition Council makes Eight Recommendations to Increase Competition on the Romanian Fuel Market
In a recent press release, the Romanian Competition Council (“RCC”) set forth the following recommendations for stimulating competition on what it deems to be a very concentrated fuel market:
1. Creation of a database and a web/mobile application, where consumers may compare fuel prices from various companies in order to help them buy fuel based on the quality/price ratio, thereby stimulating competition (the web-based application would require distributors to post any modification to gas station prices in real time, within 30 minutes of any change).
2. Display fuel prices on billboards at highway entries, indicating each company that owns a gas station, its location and prices.
3. Incentivise competition on highways through potential amendments to public procurement legislation, so that bidders for the construction of gas stations on highways would receive a higher ranking if they do not already have a presence in the vicinity (city or road segment).
4. Publication of results of controls on fuel quality conducted by the public authorities on their website, including: the name of the company, the location of the gas stations subject to the control, the result and/or any administrative sanctions imposed.
5. Increasing the number of distributors on the fuel market by facilitating the entry on the market of large hypermarkets/ supermarkets (a method that has already been successfully implemented in other countries, such as the UK and France). The RCC is said to initiate consultations to find a solution to facilitate access to the fuel market.
6. Changes in the authorization regime for the construction of commercial locations, facilitating the construction of gas stations in the outside perimeter of large commercial centres (and mitigating current restrictive building regime for fuel stations).
7. Removal of barriers to entry on the fuel market, particularly, administrative and regulatory permits, which are significantly more numerous for gas stations than the number of permits required for operating common buildings. With respect to the time period required for the authorization to operate a new gas station, RCC recommends that this period is reduced in order to reduce costs and burdens for new operators.
8. Implementation of competition compliance programmes. RCC recommends that companies on the fuel market introduce competition compliance programmes in order to avoid the risk of breach of legal provisions and potential negative financial consequences on the company.
Even though a couple of the recommendations are directly aimed at individual companies (e.g., implementation of competition compliance programmes), those aimed at public authorities, if adopted, are likely to reduce barriers to entry and enhance competition on the market. With respect to implementation of competition compliance programmes, the RCC’s recommendation should be read in line with the RCC’s ongoing scrutiny of the fuel market, with an emphasis of price fixing/cartel and other anti-competitive behaviour. The RCC’s press release is another gentle reminder to operators on this market to keep away from anti-competitive conduct and to ensure their organisations are well prepared to ensure compliance on this market.
If you would like more information, please contact Cristina Popescu, Ana-Maria Nistor or Claudia Nagy.