The Hellenic Competition Commission initiated a regulatory intervention in the petroleum sector to assess competition conditions in the production and distribution stages of key products in the Greek market. This intervention follows a market mapping exercise and is influenced by significant economic shocks, including the COVID-19 pandemic and the war in Ukraine. Competition law advisors should monitor developments and contribute to the public consultation to provide insights into competition dynamics in the petroleum industry. Competition law advisors conducted a thorough investigation into the petroleum sector in Greece, analyzing competition conditions, market structure, and barriers to entry. They examined demand trends, prices of petroleum products, refining margins, and retail prices from 2019 to 2022. The analysis also focused on the activities, trade flows, and efficiency of refining and trading companies during this period. Additionally, the pass-through of price changes and asymmetry control were evaluated across different regions, including major areas like Attica, Thessaloniki, Heraklion, and Achaia. Factors such as pricing mechanisms, inventory management, trade flows, and storage availability were considered. The assessment aimed to understand profit margins and operational efficiency in the industry, providing valuable insights for competition law advisors working with businesses in the petroleum sector. During the refining stage, a duopoly situation with high concentration levels is observed, impacting price formation for domestic sales of petroleum products. Key factors influencing prices are shared between the two companies, with the Platts price index playing a significant role. Despite increased refining margins, companies did not show operational profits in 2020 due to limited demand and high production costs. The second shock's increased refining margin led to significant operational profits due to higher demand and production. Existing production capacity and industry contraction act as barriers to entry for new companies. High capital costs, unpredictable profit margins, and regulatory hurdles further hinder competition in the market. Competition law advisors should consider these factors when advising businesses in the petroleum refining industry. Imports do not seem to exert significant competitive pressure on refining companies. The need for safety stock may hinder imports for independent trading companies. Companies satisfy their needs through storage and service contracts, potentially reducing competition intensity or creating bottlenecks, especially in island areas. Imports could serve as alternative supply sources for trading companies, exerting competitive pressure on refining companies. The lack of imports, combined with storage space restrictions and increased inventory costs, pose entry/expansion barriers limiting effective competition. Refining companies can profitably increase prices without being significantly affected by customer actions or constrained by potential competitors. Considering pricing factors from refining companies to trading companies, it is clear that the former offset a significant portion of their risks and pass them on to customers without alternative supply sources. Refining companies earn more from domestic sales than exports. Competition law advisors should consider the implications of limited imports on competition dynamics in the refining and trading sectors. In the wholesale market, companies aim to enhance competitiveness by promoting differentiated products, services, and brand utilization. Retail outlets rely on wholesalers for supplies, lacking alternative sources. This gives negotiating power to wholesalers, constrained by limited supply sources. Challenges like vertical integration, economies of scale, and market size limit entry barriers. Difficulty in imports and storage licensing, along with high inventory costs, restrict competition. Exclusive agreements in storage facilities can hinder access for third parties, especially in remote areas, impacting competition. Competition law advisors should consider these factors when advising businesses in the fuel distribution sector. In the retail stage, there are 6,117 gas stations, with 5,825 operating under a specific company's brand. Entry barriers include high investment costs, low profit margins, and fraudulent activities. Imports could serve as an alternative supply source, pressuring refining companies. Lack of imports, storage limitations, and increased inventory costs hinder effective competition. Competition law advisors should note the importance of public consultation, open to all individuals regardless of legal interest. Submissions must be made electronically by September 30, 2024, with late responses or modifications not accepted.

Competition Commission Investigates Petroleum Sector in Greece

The Hellenic Competition Commission has launched a regulatory intervention in the petroleum sector in Greece to assess competition conditions in the production and distribution stages of key products. This initiative follows a market mapping exercise influenced by significant economic shocks like the COVID-19 pandemic and the war in Ukraine.

 Competition law advisors are advised to monitor developments and participate in the public consultation to offer insights into competition dynamics in the petroleum industry. A comprehensive investigation into the petroleum sector in Greece has been conducted, analyzing competition conditions, market structure, and barriers to entry.

 The assessment focused on various factors such as demand trends, prices of petroleum products, refining margins, retail prices, activities of refining and trading companies, pass-through of price changes, and asymmetry control across different regions in Greece.



Competition Commission Investigates Petroleum Sector in Greece

The Hellenic Competition Commission is conducting a regulatory intervention in the petroleum industry in Greece to evaluate competition dynamics amidst economic shocks, including the COVID-19 pandemic and the war in Ukraine.