RISTRUTTURAZIONE RETE CARBURANTI
PRESS RELEASE
PRESS RELEASE
Following its fact-finding investigation into the restructuring of the vehicle fuel network, the Authority has urged the fuel companies to open up the market to competition
At its meeting on 7 June 2001 the Competition Authority resolved to close the fact-finding investigation into the restructuring of the vehicle fuel market that began on 2 November 2000 at the request of the Ministry of Trade and Industry.
During the past decade very little has been done to restructure the vehicle fuel distribution network, and then under "cooperation" schemes that the fuel companies have systematically sought to conclude between themselves, which has certainly done nothing to foster competition. Decree 32/98, as subsequently supplemented and amended, was designed to liberalise market entry, particularly by replacing the government franchise system with a system of permits, paving the way to move beyond the rules requiring the closure of two or three service stations before being permitted to open a new one, and extending the range of products that service stations are permitted to sell.
However, the investigation revealed that Decree 32/98 had only partially liberalised the vehicle fuel distribution market and market access conditions, and that it was inadequate to stably guarantee competition. It specifically showed that the regional and municipal governments, which are required to perform tasks of paramount importance for the purposes of implementing Decree 32/98, have often failed to take adequate action. This had created an untenable situation affording protection to companies which are already operating on the market, which has hampered the restructuring of the network.
In essence, the previous administrative barriers to market entry have often been put back into place, both because of the municipal authorities’ frequent delays and inertia which the investigation detected on a disturbingly wide scale, and also because numerous regional governments have not yet enacted legislation to implement the decree within their jurisdictions. This is compounded by the fact that some regions that have enacted such legislation have actually reversed the liberalisation of about 40 percent of the market which had previously been liberalised by the central government, reproducing at the regional level the "protected restructuring" model that Parliament had set out to abolish with Decree 32/98.
The investigation showed, however, that the main obstacle to market entry by any potential new operators is the obligation to close existing facilities in order to open new ones. The Authority maintains that potential competition brings benefits to the whole distribution market. This being so, the adoption of the National Plan could play an important part by giving a fresh impetus to the closure of marginal service stations; secondly, the recently enacted measures laying down procedures providing access to storage facilities could, once fully operational, make it possible for companies that are not vertically integrated in the logistics phase to operate as fuel distributors
Ultimately, the Authority hopes that national and regional plans will make it possible to achieve the objective of modernising the national vehicle fuel distribution network with full market access by both present and potential competitors, and that the necessary conditions will be guaranteed to ensure that the expected improved efficiency levels are attained so that the benefits can be passed onto the consumers.
Rome, 20 June 2001.