WIREDGOV

The OFT has today launched a consultation on proposals to improve competition in the supply of petrol and diesel to filling stations in the Western Isles of Scotland.

The OFT has been investigating a possible infringement of competition law in the islands, in particular the contractual arrangements for the wholesale supply of road fuels between Certas Energy UK Limited ('Certas', formerly known as GB Oils Limited) and certain filling stations on the islands.

The OFT's consultation is on commitments proposed by Certas which are designed to address the OFT's competition concerns.

The proposed commitments will bring an end to contracts which require many filling stations on the islands to buy fuels exclusively from Certas for five years. The commitments will also open up access to Certas' marine terminal in Loch Carnan, in South Uist, to potential competitors to Certas for a period of five years. At the same time, the commitments will extend access to Certas' marine terminal in Stornoway, in the Isle of Lewis, to potential competitors to Certas until the end of 2017.

Ann Pope, Senior Director in the OFT's Services, Infrastructure and Public Markets group, said:

'These proposed commitments offer a real opportunity for alternative fuel suppliers to enter the market which should ultimately help make fuel prices more competitive to the benefit of people and businesses in the islands. The commitments address the OFT's competition concerns and at the same time send a clear message that suppliers need to comply with competition law even in smaller local markets.

'We would now like to hear the views of the community and all other interested parties before we make a decision on whether to accept the commitments.'

Any person wishing to comment on the commitments should submit their views to the OFT by 17 April 2014 to:

Western Isles Fuel Commitments Consultation
Office of Fair Trading
Fleetbank House
2-6 Salisbury Square
London EC4Y 8JX

Email: WIFCConsultation@oft.gsi.gov.uk

Alongside this investigation, the OFT has also carried out a preliminary investigation of specific aspects of Certas' conduct in the Shetland Islands. Having assessed the evidence that it has gathered to date, the OFT considers that the likelihood of a successful case outcome resulting from further investigation of Certas' conduct in the Shetland Islands does not justify the expenditure of resources that such further investigation would require. Accordingly, the OFT has decided to close that aspect of its investigation for reasons of administrative priority. If any new evidence is provided to the OFT then this decision will be reviewed.

NOTES

1. You can see all updates on this case on the project webpage. 
2. The Competition Act 1998 empowers the OFT to accept such binding commitments from parties under investigation as it considers appropriate to address the OFT's competition concerns. Where the OFT proposes to accept the commitments offered, it will consult those who are likely to be affected by them and give them an opportunity to give the OFT their views. 
3. When the OFT has formally accepted commitments, it must close its investigation into the agreements that were the subject of the investigation. The OFT may re-open its investigation and take other action in certain limited circumstances (for example, where it has reasonable grounds for believing that there has been a material change of circumstances since the commitments were accepted).
4. Any decision by the OFT accepting binding commitments will not constitute a determination as to the legality or otherwise of the conduct by the parties under investigation either prior to acceptance of the commitments or once the commitments are in place.
5. The OFT closes on 31 March 2014, after which this consultation and any decision in the investigation becomes the responsibility of the Competition and Markets Authority (CMA).Correspondence sent to the address above will be forwarded to the CMA. 
6. On 1 April 2014, the Competition and Markets Authority (CMA) will become the UK's lead competition and consumer body. The CMA will bring together the existing competition and certain consumer protection functions of the Office of Fair Trading and the responsibilities of the Competition Commission, as amended by the Enterprise and Regulatory Reform Act 2013.