Oil giants raided over fears of price fixing

Huge penalties and prosecutions could be in store for the oil companies whose offices have been raided by European Commission officials on suspicion of fixing prices. The Brussels teams pounced on the London offices of Shell, BP, the Platts energy reporting agency and the Norwegian company Statoil as part of an oil price-rigging investigation. Shell’s Rotterdam offices were also visited.

The oil companies have been accused of conspiring since 2002 to keep prices artificially high in breach of competition law.
If the allegations are confirmed the Commission can impose fines up to 10% of turnover. A similar inquiry is being considered by the Serious Fraud Office, a UK government department that can bring criminal prosecutions.

David Cameron, the UK prime minister, has said that if price-fixing is proved he wants prosecutions with the “full force of the law”.
He said: “It’s very concerning because this government is trying to do so much to help people with the cost of living.”

According to estimates UK customers have overpaid by £300bn ($450bn, €355bn) during the past decade because of inflated oil prices. Protesters complain this has raised the cost of food, clothing and other goods, closed businesses, thereby causing unemployment, and helped to spark the recession.

The European investigation was begun even though the UK’s Office of Fair Trading, an official consumer watchdog, ruled out an inquiry, announcing that competition in the industry was “working well”.

Robert Halfon, a UK Conservative MP, said: “Last year we urged the Office of Fair Trading to launch a full inquiry into alleged price-fixing by oil companies. I had a whistleblower approach me with a dossier, which we put up on our website called petrolpromise.com, and sadly nothing was done.”

Mika Minio-Paluello, an oil and gas specialist and campaigner, said of Shell and BP: “Their trading floors seem to think themselves above the law and are largely hidden from the public eye, speculating on billions of pounds’ worth of crude every day.”

Observers think Cameron’s stand may lead to criminal prosecutions of companies that manipulate household gas and electricity prices.

• Royal Dutch Shell made a £17bn profit last year, just below the previous year’s record £18bn.