Bulgaria competition watchdog accuses Lukoil of abuse of dominant position

Bulgaria’s Commission for Protection of Competition (CPC) has accused Lukoil Bulgaria, the downstrewam unit of Russian privately-held oil major Lukoil, of abusing its dominant market position.

In a statement, the regulator said that its investigation was prompted by complaints lodged by Lukoil Bulgaria’s competitors on the fuel retail market, OMV Bulgaria and Insa Oil.

The complaint alleged that the Lukoil subsidiary breached both Bulgaria’s Competition Protection Act and the Treaty on the Functioning of the European Union, specifically the articles that prohibit abuse of dominant market position.

CPC said that during its investigation, it “identified competition issues in relation to the price policy applied by the company in the wholesale trade of motor fuels on the territory of the country.”

Lukoil Bulgaria put price pressure on its competitors by “gradually modifying price conditions in wholesale trade and removing discounts based on amount purchased, which can prevent, limit or breach competition on the fuel markets and impact consumers’ interest,” the regulator said.

The watchdog said that this behavior was “a common strategy to limit wholesale trade of fuels in the country, with the aim of increasing its dominant position on the market of wholesale trade in fuels” and an abuse of dominant position.

CPC said that it was giving Lukoil and the plaintiffs 60 days to present written objections or positions on its ruling, but gave no further details with regard to potential repercussions on Lukoil Bulgaria.

In addition to the retail unit, Lukoil also owns Bulgaria’s sole refinery, Lukoil Neftochim in Bourgas at the Black Sea coast, which is the main source of petrol and diesel fuel sold on the Bulgarian market.

CPC has previously investigated Lukoil Bulgaria – in 2017, as part of a price-fixing cartel on the fuel distribution market, and in 2012, for alleged abuse of dominant position (it was cleared) and participation in a price-fixing cartel. Both times, the regulator closed the investigations without imposing any fines.

Separately, the regulator ruled in 2017 on a complaint filed against both Lukoil Bulgaria and Lukoil Neftochim, lodged by another fuel retailer, finding that there was no evidence that either of them abused their market position.

(Lukoil petrol station. Photo: sociate/flickr.com)

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