European Commission fines nine energy companies €676 million for price-fixing

01 October 2008

It seems that oil companies are not satisfied raking in billions as oil prices maintain their record highs - now, nine of them have been fined a total of €676 million  by the European Commission for operating what it called a price-fixing "paraffin mafia". (See: Record oil prices send Exxon and Shell quarterly profits to record highs)

The nine companies which have been fined are US giant Exxon Mobil, Repsol of Spain; Italy's ENI, Tudapetrol, Hansen & Rosenthal and RWE of Germany, France's Total, and MOL of Hungary. A 10th firm, the Anglo-Dutch oil firm Shell, escaped a fine as it blew the whistle on the cartel's activities.

Sasol Ltd., South Africa's biggest fuel supplier, was fined €318 million, the highest penalty levied on the nine wax producers by the European Commission in Brussels. Total, Europe's third-largest oil company, was fined €128 million.

Irving, Texas-based Exxon Mobil, the world's biggest oil company, was fined €83.6 million euros and Repsol YPF SA, Spain's largest oil company, received a €19.8 million penalty. Royal Dutch Shell Plc, Europe's largest oil company, avoided a €96 million fine because it was the first company to cooperate with inspectors.

''There is probably not a household or company in Europe that has not bought products affected by this `paraffin mafia' cartel,'' said EU Competition Commissioner Neelie Kroes in a statement. ''Such illegal cartel behavior cannot and will not be tolerated.''

Kroes has made fighting cartels one of her main priorities since her five-year term began in 2004. The penalties are the fifth this year and the fourth highest against a single cartel. The biggest price-fixing fine was €992.3 million in 2007 against five elevator makers. Similar penalties imposed earlier include a €750.5 million fine on switchgear makers and a €790.5 million fine on vitamin manufacturers.