ECONOMY

HELPE rejects responsibility for high gas pump prices

Refineries have no responsibility for excessive fuel prices in the retail market, refiner Hellenic Petroleum (HELPE) said in a memorandum submitted yesterday to the Competition Commission. The commission is investigating the operation of the domestic oil products market after several complaints of excessive pricing. It is expected to issue a report soon. The commission believes oligopoly conditions in the Greek refining market (there are only two major players, Hellenic Petroleum and Motor Oil) are partly to blame for high prices and has remarked on the absence of oil product imports despite a European Union directive requiring member states to have fuel reserves for at least 90 days of consumption. Hellenic Petroleum’s memo claims that fuel prices, at the refining stage, closely follow the fluctuations of crude oil prices in international markets as well as the changes in the euro/US dollar exchange rate. It adds that, during the 2002-2005 period, refineries’ gross profit margins accounted for 3.5 percent of the retail price of diesel and 3.7 percent of the unleaded gasoline price. The gross profit margins at the retail level are 12.2 percent and 14.5 percent respectively. On the commission’s oligopoly charges, Hellenic Petroleum responded by saying that several European countries also have a limited number of refineries (up to three). The lack of imports, it says, is the result of the local refineries’ offering products at competitive prices. After all, the memo remarks, domestic oil products traders have a large enough storage capacity to import almost five times the amount of oil products currently imported. Hellenic Petroleum managers contend that high fuel prices in the Greek market are the result of the relatively high number of gas stations (8,500), which means relatively high operating costs for the retailing companies. They say that price gouging, where it exists, can be fought by introducing cash registers at gas station pumps.