April 14. 2024. 7:30

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Lukoil Group in Bulgaria fined €100 million for abusing dominant position

The Lukhoil Group in Bulgaria must pay €100 million for abusing its dominant position by limiting access to tax warehouses and transport infrastructure, which can reduce the import of fuels into the country, according to the Commission on Protection of Competition (CPC).

The inquiry of CPC focused on the behaviour of Lukoil Neftochim Burgas AD and Lukoil Bulgaria EOOD and found that the group broke the law by not providing access to importers and producers of motor fuels to its own tax warehouses, restricting imports by sea by blocking the tax warehouses connected to the Rosenets Oil Terminal and the Petrol-Varna Petrol Terminal, and not providing access to the group’s petroleum product pipelines for the transportation of fuels to other producers and importers.

“This can prevent, limit or distort competition and affect the interests of consumers by limiting the import of motor fuels into the country,” the CPC stated.

Lukoil Group owns the most extensive storage and related transport infrastructure, and along with a high market share in the automotive fuel storage market, it is a dominating enterprise.

However, the CPC found that the Group uses a strategy that includes several anti-competitive practices which, if applied consistently and cumulatively over more than five years, set up barriers to the import of fuels, preventing it entirely or making it economically ineffective.

It is obligatory for motor fuels to pass through personal or leased tax warehouses – a requirement that directly affects the entry of new players into the market since the construction of own warehouses requires huge investments, and the rental of foreign capacities is limited because the largest capacities in the country are owned by Lukoil, which limits access to them, states the CPC.

This allows Lukoil to maintain its leadership position in Bulgaria at the wholesale and retail trade level.

The CPC says that Lukoil abuses its dominance both under national law and under European Union law, as restricting imports into Bulgaria can significantly affect the pattern of trade between member states.

This sanction is not the first for Lukoil. Less than two months ago, the CPC sanctioned Lukoil-Bulgaria EOOD with about €33 million due to a dominant position in the form of a margin squeeze, performed against the company’s competitors in the wholesale trade of motor fuels in Bulgaria.

(Krassen Nikolov | EURACTIV.bg)