Shell and BP accused of collusion in South Africa

A six-company price-fixing racket spanning decades.

New Statesman
Photo: Getty

The South African Competition Commission has called for six oil companies – Shell, BP, America’s Chevron, France’s Total and domestic producers Sasol and Engen – to stand before the South African Competition Tribunal for collusion. 

An investigation that begun in 2009 revealed that the six companies to have kept diesel prices artificially high, using the South African Department of Energy’s maximum price guideline as their benchmark.

The Commission accused the firms of “extensive exchanges of commercially sensitive information”, such as monthly fuel sales, to enable them to “track each other’s sales and to align their strategies in the market”.

The investigation found that confidential information exchanges had been occurring since the 1980s, and from 2005, went through the South African Petroleum Industry (SAPIA).

The companies were also accused of colluding to influence the regulatory environment of South Africa's fuel market, attempting to raise barriers to entry for new firms in order to maintain the status quo.

The scandal has had far-reaching effects in South Africa, since diesel is used heavily by the transport industry, the mining industry, fisherman, and farmers.  

Each company faces penalties of up to 10 per cent of the companies’ annual South African turnover if found guilty by the Competition Tribunal.

“We are committed to conducting our business in a manner that is both fair and ethical. As a matter of policy, Shell prohibits anti-competitive conduct”, a spokesman told The Telegraph.

“We are looking into the implications of the announcement with our legal counsel”, announced a BP spokesman.