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Promotion of Competition at the Markets for Oil and Oil Products

Promotion of Competition at the Markets for Oil and Oil Products. Ieva Jaunzeme Chairperson of the Competition Council of Latvia 24.01 .201 2. Scope of the Competition Council’s actions. Market Inquiries Merger Control Investigation / detection of infringements prohibited agreements

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Promotion of Competition at the Markets for Oil and Oil Products

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  1. Promotion of Competition at the Markets for Oiland Oil Products Ieva Jaunzeme Chairperson of the Competition Council of Latvia 24.01.2012

  2. Scope of the Competition Council’s actions • Market Inquiries • Merger Control • Investigation / detection of infringements • prohibited agreements • abuse of dominant position • Opinions on draft and effective legislation

  3. Sector inquiries: insight into the market • Structure of price* • * Approximate retail price structure. Data from particular dates within time from 01.12.2008. to 30.04.2010.

  4. Sector inquiries: insight into the market • Pricing practices • similar price structure • publicly available prices (on • pylons, news agencies, • internet, etc.) • homogenous product • transparent market • Synchronous pricing

  5. Sector inquiries: insight into the market • Market structure • 139 market participants • 50-60% of market share belongs to 3 companies • <40% Latvija Statoil • <30% NesteLatvija • <20% LukoilBaltija R • 11 market participants have market share within 1-10% • market share of the rest 125 market participants does not exceed 1%

  6. Sector inquiries: insight into the market • Correlation with Platts prices • Platts prices and exchange rate fluctuations substantially influence retail price • Average retail price / Platts price / Exchange rate • close correlation

  7. Sector inquiries:searching solutions • Ongoing market inquiry on gas fuel • what are the possibilities and barriers for consumers to switch to this alternative • Ongoing market inquiry on franchising • does the practice of franchising in fuel market endanger the independence of involved enterprises

  8. Thresholds to merger control (Competition Law) • Permission of the Competition council is needed if: • the combined turnover for the previous financial year in the territory of Latvia has exceeded 35 571 795 € • or • the total market share in the relevant market exceeds 40 % • The notification shall not be submitted if: • the turnover of one from two participants in the merger for the previous financial year in the territory of Latvia has not exceeded 2134308 € 8

  9. Infringement cases 20.07.2007. decision on termination of a case • the case initiated after a claim • no evidences of prohibited agreement were found • collective dominance in the fuel retail market in Latvia: • LatvijaStaoil, NesteLatvija, LukoilBaltija R • consequences – stricter limitations to mergers, acquisition of • gas stations Ongoing investigation • initiated ex officio • case on prohibited agreement between: • LatvijaStaoil, NesteLatvija, LukoilBaltija R

  10. Address:55 Brivibas Str.Riga, LV-1010LatviaPhone: +371 67282865Fax: +371 67242141E-mail:konkurence@kp.gov.lvWeb:www.kp.gov.lv www.freeimages.co.uk www.freedigitalphotos.net

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