The CPC imposed a sanction on Lukoil of over BGN 195 million

The Commission for the Protection of Competition (CPC) imposed a property sanction in the total amount of BGN 195,136,175 for a violation committed by "Lukoil-Bulgaria" EOOD and "Lukoil Neftohim Burgas" AD, the Commission reports.

The violation is expressed in the abuse of a dominant position in the market for the storage of motor fuels by not providing access to importers and producers of motor fuels in their own tax warehouses, limiting imports by sea by blocking the tax warehouses connected to an oil terminal (OT) " Rosenets" and OT "Petrol – Varna", as well as not providing access to the group's oil product pipelines for the transportation of fuels to other producers and importers, which may prevent, limit or distort competition and affect the interests of consumers by limiting the import of automotive fuels in the country, according to the CPC.

Given the socio-economic importance of fuels, due to their direct impact on the prices of goods and services offered on the Bulgarian market, within the framework of an antitrust proceeding, the Commission performed an analysis of the competitive environment of the markets along the chain of sale of automotive fuels.

In the course of the proceedings, the Commission identified competitive problems related to access to tax warehouses, which is why it focused the investigation on the behavior of "Lukoil Neftohim Burgas" AD and "Lukoil Bulgaria" EOOD (Lukoil group) in relation to limiting access to tax warehouses and transport infrastructure, which is of a nature to limit the import of fuels into the country.

The commission found that the Lukoil group owns the largest storage and related transport infrastructure, which, together with the high market share of the automotive fuel storage market, makes it the dominant company in the relevant market. Based on the analysis of the behavior of the companies, it was found that the companies apply a comprehensive strategy consisting of several anti-competitive practices which, applied consecutively and cumulatively over a period of more than 5 years, set up barriers to the import of fuels, preventing it entirely or making it economically inefficient. In view of this, the Commission came to the conclusions that the companies of the group have committed an abuse of a dominant position through a set of actions consisting in not providing services for the reception and storage of fuels in their own tax warehouses, limiting access to the tax warehouses related to the most the major marine oil terminals in the country and not providing access to the group's oil product pipelines for the transportation of imported fuels.

Passage of motor fuels, which are excise goods by their nature, through own or leased tax warehouses is a mandatory requirement for all market participants who manufacture or import/intra-community acquisition (IAP) of fuels on the territory of the country. This requirement directly affects the possibilities of imports and VOP in the country and limits to a certain extent the entry of new market participants, since the construction of own warehouses requires huge investments, and the renting of foreign capacities is limited due to the fact that the largest capacities in the country are owned by the dominant company, which limits access to them, the CPC states.

The practices in question represent a general strategy of the group to create obstacles to the import of fuels into the country and are qualified as one infringement, as they are aimed at the same anti-competitive result and are carried out permanently over time.

These actions of the defendant companies limit the competition already at the first level in the chain of sale of petroleum products - in the primary sale of automotive fuels from production and import, which allows maintaining the leadership position of the "Lukoil" group in the country at the following levels - wholesale and petty. The creation of barriers to the import of fuels into the country is likely to lead to a redirection of demand to fuels of local origin, i.e. those of "Lukoil Neftohim Burgas" AD. This reduces the choice of wholesalers and is accordingly transferred down the chain of sales of automotive fuels and ultimately to consumers, reports the antimonopoly authority.

The conduct constitutes an abuse of dominance both under national law and under European Union law, as, by restricting imports into the country's territory, it can significantly affect the pattern of trade between member states. In the framework of the proceedings, the Commission cooperates with the European Commission and approves the decision of the CPC, in relation to the requirements of Regulation (EC) No. 1/2003 regarding the implementation of the competition rules provided for in art. 101 and art. 102 of the Treaty on the Functioning of the European Union (TFEU), specified by the CPC.