Bulgarian Rightists Slam Anti-Trust Watchdog for Inefficient Fuel Sector Policy

Energy | February 29, 2012, Wednesday // 14:26|  views

Right-wing leader Ivan Kostov has insisted that the management of Bulgaria's anti-trust watchdog should step down. Photo by BGNES

Ivan Kostov, Co-Chair of the rightist Blue Coalition, has called for the resignation of the management of the Commission on Protection of Competition (KZK) over the watchdog's failure to protect Bulgarian consumers"

"12 months ago, following waves of protest by Bulgaria's civil society, a moratorium was imposed on fuel prices with the agreement of the government. Lukoil made this "gesture" because it was concerned by the protests. It turns out that now Lukoil holds a monopoly over almost 80% of the warehouses for liquid fuels and has so far failed to install measuring devices allowing the monitoring of liquid fuel flows," Kostov said in Parliament on Wednesday.

Kostov reminded that the anti-trust watchdog had been asked at that point to put an end to the monopoly pricing and to the high monopolistic profit margins.

The right-wing leader noted that the Ministers of Economy and Transport had sided with the initiative.

Kostov argued, however, that nothing had been done to remedy the situation and KZK had failed to make a pronouncement on the problem.

He emphasized that allegations that international prices were being taken into consideration were untrue "because if this were the case, diesel prices in Bulgaria would be lower than in France".

"In France, where production costs are certainly much higher, fuel prices are much lower," Kostov added.

He vowed that the Blue Coalition would deploy all of the parliamentary instruments it saw fit to make the anti-trust watchdog execute its duties and protect the market.

"Monopoly pricing is driving small and medium-sized companies from all over the country into bankruptcy, which runs against the widely trumpeted policy of center-right party GERB to encourage small businesses and family businesses," Kostov remarked.

He urged the parliamentary majority to advance proposed amendments to the Protection of Competition Act so as to prevent the abuse of companies' dominant position on the Bulgarian market.

Last year KZK conducted a sector analysis of fuel trade but kept the results secret.

On the basis of the gathered data, KZK launched two probes, one aimed at uncovering a suspected concerted pricing practice regarding the wholesale prices charged by  four companies, Lukoil Bulgaria, Rompetrol Bulgaria, Naftex Petrol and OMV Bulgaria, and another one aimed at investigating Lukoil Bulgaria's policy of offering discounts and fixing anti-competitive minimum prices.

A few days ago, KZK informed that the proceedings had not been wrapped up and refused to commit to a concrete deadline.

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Tags: Ivan Kostov, Blue Coalition, Commission on Protection of Competition, KZK, fuel sector, Lukoil Bulgaria, discounts, wholesale prices, cartel


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