Italian Competition Authority fines six oil companies

28 July 2006

Eutimio Monaco

June 2006

The Italian Competition Authority has concluded its investigation into a number of oil companies in relation to anti-competitive arrangements in supplying airports with jet fuel and has imposed fines of €315.4million.

The Italian Competition Authority found that the purpose and effect of the arrangements were to share the market between the oil companies and prevent the entry of new operators, including airlines who wanted to provide their own supplies. The companies ENI, Esso, Kuwait, Shell, Shell Italia Aviazione (which replaced Shell on 1 December 2004), Tamoil and Total had exchanged considerable amounts of information on a continuing basis, including through their jointly-held companies Hub S.r.l., Par S.r.l., Ram S.r.l., Rai S.r.l (previously Raf S.r.l.), Disma S.p.A. and Seram S.p.A which store fuel and refuel aeroplanes. The companies also coordinated their tendering strategies for refuelling contracts and agreed to counter any attempts to change features of the market. As a result the airlines suffered worsening economic conditions.

The Italian Competition Authority has required that these companies allow third parties access to the jet fuel market. In addition, ENI, Esso and Kuwait (in the case of Hub and Par), Shell IAV, Tamoil and Total (in the case of Rai and ENI), Esso, Kuwait, Shell IAV and Total (in the case of Disma and Seram) must ensure that they cease their joint shareholdings in these businesses by 30 June 2008. In the meantime, the relevant companies must ensure that the business model for these jointly held companies does not allow for the exchange of information between the parent companies.

Total had also undertaken to allow Alitalia to manage its own refuelling at Fiumicino airport. The Italian Competition Authority regarded this as an extenuating factor in determining the amount of the fine for Total but did order that this arrangement be made permanent.

The Competition Authority issued the following fines: ENI: €117,000,000; Esso: €66,690,000; Kuwait: €46,800,000; Shell: €53,320,000 and Shell IAV: €3,140,000; TamoilL: €19,620,000 and Total: €8,860,000

Source: Italian Competition Authority Press Release dated 20 June 2006