Public finances anywhere need to be sanitized every once in a while. This year this coincided with the spring cleaning in Bulgaria, with the prime minister himself setting the tone by halting public procurement procedures worth around 1 billion euro.
The Commission for Protection of Competition (CPC) chimed in; for a long while it had been making futile attempts to put some order into the liquid fuel market in the country, long suspected of all evils that spring to mind. So far it had been unable to put together the evidence needed in corroboration of the widespread suspicions of cartel price agreements among the leading chains of filling stations and the monopoly of the only existing refinery in the country. Now the time has come and we have collected enough evidence to conduct a real investigation, CPC officials say, obviously meaning the record low oil prices in the world and the glaringly slow pace of price reduction of petrol and diesel at filling stations. All the more so that a highly controversial but exceedingly powerful and influential businessman from Varna has, for months, been demonstrating that there definitely is a cartel that sets prices while he himself follows market logics which allows him to sell liquid fuel at 20 percent cheaper prices.
Now the CPC has got the seven biggest petrol and diesel distributors in its cross-hairs, among them leading world companies. The decision is “courageous because it affects leading world public companies,” commented Deputy Prime Minister Tomislav Donchev promising the commission “all the help it may need”.
Even though, as the CPC itself admits, proving the existence of a cartel agreement is a hard nut to crack and will take time, the commission insists it is determined to do so. If it succeeds, there could be nasty consequences for dealers - fines amounting to 10 percent of their annual turnover, a sum that is not to be underestimated even though ours is a small market, as the high price of fuels in Bulgaria places the country among the top five in Europe. That means money, lots of money. Not to mention another outcome - a tarnished image which invariably has additional economic and financial consequences.
The public is, of course, applauding the CPC's onslaught against high prices, all the more so that the government itself as represented by Finance Minister Vladislav Goranov hinted that if everything went according to plan a drop in prices at filling stations was to be expected, to the satisfaction of drivers. These hopes are nourished further by the fact that the CPC is planning to investigate the conduct of retail dealers but also of fuel manufacturers. In Bulgaria, this means the only oil refinery in the country, the Russian Lukoil which is suspected of abuse of its dominant position, as, according to its official documents it is exporting its products at lower prices than it is selling them on the domestic market.
Whether the otherwise commendable intentions of protecting the rules of free competition on the fuel market in Bulgaria will this time be crowned with success - that would be difficult to say. But there is no doubt that the CPC's motives for its onslaught on non-market conduct are persuasive. The battle against the oil titans will be no mean effort - that too is beyond any doubt.
English version: Milena Daynova
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