Competition authority finds no price gouging on fuel despite hundreds of complaints

The competition authority found no legal breaches behind soaring fuel costs despite 900+ complaints, attributing hikes to global wholesale prices.

The Commission said that it received over 900 complaints since March 2 and while fewer than 5% of them “reported specific consumer protection issues with certain home heating oil suppliers” it found the “vast majority” of the complaints examined articulated high levels of “consumer distress and frustration at very sudden and significant price rises across essential fuel products”.

The competition authority has said that it has not seen any breaches of the law relating to the recent surge in fuel costs after receiving over 900 complaints about the price hikes since the start of last month.

The Competition and Consumer Protection Commission (CCPC) published an analysis that found the sharp increase in prices were being driven by wholesale costs resulting from the war in Iran and the subsequent closure of the Strait of Hormuz where 20% of the world’s oil supplies pass through.

The Commission said that it received over 900 complaints since March 2 and while fewer than 5% of them “reported specific consumer protection issues with certain home heating oil suppliers” it found the “vast majority” of the complaints examined articulated high levels of “consumer distress and frustration at very sudden and significant price rises across essential fuel products”.

“Controlling prices in competitive markets is outside the scope of competition and consumer protection law. As a result, complaints relating solely to price increases would not constitute a breach of these laws,” the CCPC said.

In response to the consumer protection issues identified in the minority of complaints, the CCPC said it has written to the home heating oil industry to remind them of their consumer protection obligations under the law.

CCPC Chair Brian McHugh said the “distress and concern” they’ve heard from consumers is “very real” with a large number of consumers suspecting that recent price increases “were illegal and motivated in significant part to increase profits”.

“This includes the requirement to clearly explain to consumers how their prices are calculated. CCPC investigators are engaging with consumers and companies to further examine a small number of complaints,” it said.

In addition, the CCPC set out a high-level market analysis that found that the road fuels and home heating markets are reasonably competitive. It also compared movements in wholesale prices to retail prices and considered international comparisons of retail fuel prices.

Taken together, it found that the price increases seen in recent weeks were not driven by competition issues, but rather by significant increases in international wholesale costs.

Chair of the CCPC Brian McHugh said the “distress and concern” they’ve heard from consumers is “very real” with a large number of consumers suspecting that recent price increases “were illegal and motivated in significant part to increase profits”.

“However, while we have identified a small number of questionable consumer protection practices, we have not seen price increases that are in breach of any law. Ireland is an open market economy where businesses are free to set their own prices for goods and services,” he said.

Of the over 900 complaints, the majority, 59%, related to the increasing price of home heating oil with the remainder relating to prices at the pumps. The vast majority of the complaints, 875, related to price increases and price gouging.

The CCPC said that price increases can be a breach of competition or consumer protection law when they are not clearly communicated to consumers or when a company is considered to be abusing its dominant position in the market.

However, these complaints “related to prices that were clearly communicated to consumers, therefore no breach of consumer or competition law was identified”.

“They also related to a wide range of companies in reasonably competitive markets, therefore no potential breach of competition law was identified. As no potential breach of consumer protection or competition law was identified, no enforcement or other compliance action can be taken by the CCPC in response,” the Commission's analysis said.