cpc investigation — cpc investigation — The Commission for the Protection of Competition (CPC) has initiated a probe into Petrolina’s acquisition of ExxonMobil’s share capital, citing concerns over competition distortion.
ExxonMobil’s share capital was acquired through Med Energywise Ltd, a subsidiary of Petrolina, with the transaction notification posted in March this year. The CPC expressed that this acquisition raises significant doubts regarding its compatibility with effective competition.
According to the CPC, the transaction is likely to impact the sales of petroleum products both horizontally and vertically. Horizontal competition refers to firms at the same level of the supply chain competing against each other, while vertical competition involves different levels, such as manufacturers and retailers. The CPC’s concerns stem from the high concentration of market power within the petroleum import and sales sectors.
Petrolina’s competitive proximity to ExxonMobil amplifies fears of potential price increases and market coordination, which could have severe implications for consumers. The CPC highlighted that the acquisition could particularly hinder local competition within a 4km radius of petrol stations operated by both companies.
Petrolina plays a significant role in the Cyprus energy market, engaging in the import, storage, and trade of fuels and lubricants under the brands ‘Petrolina’, ‘Agip’, and ‘ENI’. Its extensive network of petrol stations throughout Cyprus and its terminal in the Vasiliko area facilitate the storage of liquid fuels, allowing the company to serve both commercial customers and other petroleum firms in Cyprus and Greece.
Meanwhile, ExxonMobil distributes fuels under the brand name ‘Esso’. The company’s offerings include 95 octane unleaded gasoline, 98 octane unleaded gasoline, agricultural diesel, heating oil, low-sulfur diesel, kerosene, and marine fuels. The overlap of services and market presence between Petrolina and ExxonMobil raises essential questions about the potential for diminished competition in the sector.
As the CPC continues its investigation, the implications of this acquisition on the market dynamics of Cyprus’s petroleum sector remain a focal point, with stakeholders and consumers watching closely.
