Following significant price increases and calls from Government representatives to the public to notify high fuel prices and price gouging to the Competition and Consumer Protection Commission, the CCPC has published its report examining the issues raised. This is in the context of conflict in the Middle East and the resultant impacts on international commodity markets.
Consumer complaints
The CCPC has published details of more than 900 complaints received from consumers from the week of 2 March. While a small number (fewer than 5%) of complaints reported specific consumer protection issues with certain home heating oil suppliers, the CCPC found that 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.
In response to the consumer protection issues identified, the CCPC has written to the home heating oil industry to remind them of their consumer protection obligations under the law. 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.
CCPC Chair, Brian McHugh, said:
“The distress and concern we heard from consumers was very real. A large number of consumers suspected 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.”
Market analysis
The CCPC report sets out a high-level markets analysis informed by previous research, a large number of merger investigations in road fuels and home heating markets, and a review of published profit margins. The analysis found that these markets are reasonably competitive.
The CCPC examined wholesale costs in these markets and confirmed stark increases in prices across relevant markets. The CCPC also compared movements in wholesale prices to retail prices and considered international comparisons of retail fuel prices.
Taken together, the examination of wholesale prices, retail prices and the review of the home heating oil and road fuel markets indicate that the price increases seen in recent weeks were not driven by competition issues, but rather by significant increases in international wholesale costs.
CCPC Chair, Brian McHugh, said:
“The CCPC is very familiar with the road fuel and home heating oil markets in Ireland, and we know these markets are relatively competitive. We have examined the wholesale price increases across
Conclusion
The number and nature of the complaints received clearly demonstrate very high levels of worry and concern among consumers and the CCPC strongly acknowledges the extent of the impact on consumers and businesses. However, as the increased fuel prices are not due to competition issues in the market, there are no competition or consumer protection measures that can be taken to alleviate the impacts of high wholesale prices on consumers and businesses.
The CCPC will continue to screen contacts to its helpline for breaches of consumer protection and competition law and monitor markets for signs of dysfunction. The CCPC will also work with the Commission for the Regulation of Utilities (CRU), as requested by Government, on a longer-term study to identify any obstacles currently preventing the electricity and gas markets from operating efficiently.
2026 Energy market review
The CCPC has been asked by Government to review the energy market and identify any obstacles currently preventing the market from operating efficiently. This work is currently underway and the CCPC is engaging with stakeholders including the Commission for Regulation of Utilities (CRU) to ensure that our analysis complements its existing work.
2022 Fuel market report
In November 2022, the CCPC published an in-depth analysis of the retail motor fuel market and pricing over nineteen days in March 2022. This followed sharp price increases, against an international backdrop of price increases in energy, the war in Ukraine and high inflation.
The aim of the analysis was to examine claims of lack of competition or pricing irregularities in the sector. The CCPC received detailed pricing information relating to 50% of the service stations in the State. The research showed that international prices drove price increases for consumers in the period leading up to the Government’s excise cut, rather than stations illegally coordinating their prices or a lack of competition.
Link to 2022 report press notice