Stampa

LPG (GPL) heating prices in the region of Sardinia


PRESS RELEASE


PRESS RELEASE


ENERGY:  ANTITRUST AUTHORITY SANCTIONS BUTANGAS AND LIQUIGAS FOR COMPETITION-RESTRICTING AGREEMENT IN THE LPG DOMESTIC-USE SECTOR

Fines of 4,888,121 euros and 17,142,188 euros, respectively. Eni exempted from fines in exchange for exposing the secret cartel.  Participation by Fiamma 2000, Sardagas and Ultragas Tirrena in related agreements in the Sardinian market dismissed.

In a meeting on March 24, 2010, the Autorità Garante della Concorrenza e del Mercato ruled that Butangas, Liquigas and Eni had set up a competition-restricting agreement to coordinate nationwide variations in the public price lists for LPG (GPL)  cylinders and small tanks from 1995 to 2005,  to the detriment of final consumers. As provided for by law, the Antitrust Authority rewarded Eni with special 'whistleblower' treatment and exemption from fines for having furnished concrete proof concerning the secret cartel. Butangas and Liquigas, alternatively, were fined 4,888,121 euros and 17,142,188 euros, respectively, in acknowledgement of the seriousness and duration of the agreement.
Eni first reported the cartel on October 31, 2008, prompting the Antitrust Authority to launch an investigatory proceeding to determine whether Butangas, Liquigas, Eni, Fiamma 2000, Sardagas and Ultragas Tirrena had set up a competition-restricting agreement for LPG (GPL) cylinder prices. The investigation, however, found insufficient proof to demonstrate the involvement of the latter three companies in the Sardinian market. The high LPG (GPL) cylinder prices in Sardinia actually turned out to represent local manifestations of the effects of the national cartel formed by Butangas, Eni and Liquigas.
In Eni’s request for special treatment and exemption from sanctions, it detailed an agreement made during top-level meetings between Liquigas and Butangas (chief executive officer or director for the LPG (GPL)  division) with the purpose of coordinating parallel price lists. With a former director of Eni’s LPG (GPL) business as a primary source, Eni recounted how the directors of this sector's three leading companies came into repeated contact on different occasions and used these encounters to coordinate price list variations in response to price fluctuations in international commodities. Eni also explicitly specified that the three directors used these meetings to come to agreement on the pricing strategies for their respective companies without leaving any written evidence.
The Antitrust Authority’s investigatory proceeding confirmed that executives from these three companies had met on a regular and repeated basis by reconstructing a history of contact opportunities and demonstrating that the timing of these meetings was well-suited to the joint definition of price lists.
An analysis of the price variations imposed by these three companies provided further confirmation of the cartel's existence. The three companies each modified their prices to the same extent in a synchronized manner, and the same variations were applied across the board (in terms of geographical zones and product types) for both cylinder channel and small tank channel price lists. This allowed Butangas, Eni and Liquigas to align their price lists independently of fluctuations in actual commodity prices.
The existence and characteristics of these parallel price lists demonstrates that the agreement was in fact fully implemented and allowed the participants to maintain - through its effects on final customer prices - their market shares.

Rome - March 24, 2010