8 actions to stimulate competition in the fuel market (Competition Council)

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“Fuel market is highly concentrated in Romania”, says the Competition Council and proposes eight measures and actions to boost competition and improve the competitive climate on this market.

Growth of the offers on the fuel market

Competition Council recommends the increase or diversification of fuel offer on the market by allowing large hyper/supermarkets chains that are already present in Romania to enter the fuel market. This activity would not be completely new for them, the more so since they already apply fuel marketing activities in other European countries (i.e. France, Germany, UK), where they own a significant proportion in those markets. The competition authority announced that it will initiate discussions with representatives of these companies to identify barriers that aggravate or impede the opening of fuel stations. The stake is to find solutions that will facilitate access to this market.

Barrier removal to fuel market entry

In the case of gas stations construction, considering the nature of the activity, handling flammable materials, and possible risks, explosion for example, that need to be prevented, the number of authorizations required is greater than for the common construction. But in addition to permits issued by the competent bodies in a specific area, local public authorities (i.e. municipalities, county/local councils) they may take impact decisions about lands that are managed by the administrative-territorial units. Thus, there is an overregulation risk by imposing certain restrictions on construction, to hinder or even block the construction of petrol stations in a certain area/village.

The Competition Council also recommends reducing the period of authorization for the construction of new fuel stations, which would lead to a reduction of costs necessary for new operators to access the market and increase competitive pressure on active companies at a given moment. Hence, the Competition Council will begin a process of consultation with representatives of the government bodies and county prefectures for identifying and undertaking legal steps in order to eliminate these issues.

Creating a database and a web/mobile application for comparing fuel prices

This will serve to stimulate price competition between operators on the one hand, and to give consumers the fuel choices at the best money value.

Display fuel prices on highways entries

Competition Authority recommended the Government, represented by the Ministry of Transport, to install information panels at the entrance to the highway that will contain data about the name of the company that owns the gas station, its location (i.e. km 77) and fuel prices. This recommendation aims to increase transparency in the market, supporting consumers by facilitating access to information on existing products on the market and chance to choose the most appropriate one for them.

Stimulating competition on highways

Competition Council recommended the competent authorities to analyze the possibility of amending the legislation on public procurement, so that, in case of procedures for public auctions for the construction of stations on highways, whether already built or newly built, operators who do not have presence in area (city or nearest location road segment for the bid) will have a significant credit for the score upon which the winner is determined.

Publication of results of controls on fuel quality

The central public authority for economy and trade must monitor the quality of petrol and diesel in order to meet the specifications set by traders in legal regulations. To increase the competitive pressure on the one hand, and to provide better information to consumers, the Competition Council recommends publishing on the ministry website a centralized monthly/multi-annual situation on test results. This should contain the names of companies and the location of petrol stations which were subject to control, and the result of tests performed. Also, if sanctions were imposed, they should be presented to the public.

Implementing programs for compliance with the competition law

Competition Council recommends the active companies on the market to introduce compliance programs with competition laws in order to avoid the risks of violation of legal regulations.

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