BBC Tuesday, 17 April, 2001, 15:15 GMT 16:15 UK

Holiday fuel rise fury

German and Australian drivers suffered an expensive weekend

Oil companies in Germany and Australia have been accused of profiteering after sharply raising the price of petrol in the days before Easter, only to lower them once again after the holidays.

Politicians and motorist groups in both countries have called on the competition authorities to investigate the oil firms for "collusion" and price fixing.

In Germany, the price for unleaded petrol peaked at a historic high of 2.19 Deutschmarks ($0.99, £0.69).

After the holiday, the price dropped again by about 3 Pfennigs to 2.16 DM.

Australians, meanwhile, saw prices go up by 10 cents a litre to well above one Australian dollar in the week before the vacations.

In both countries, the Easter period is one of the busiest times of the year for motorists.

US refineries blamed

The oil companies have denied that they are trying to make a quick buck.

Brigit Layes of the Association of the German Petroleum Industry blamed intense price pressure on international markets and the strong US dollar for the "price adjustment".

She told BBC News Online that it had been the 23rd price rise of the year and had caught the attention of motorists and politicians only because it had come just before Easter.

The "zigzag" movement of prices rising and falling in short order was normal, she said, and a sign of the intense price competition on the market.

Australian oil giants have similar explanations for recent price hikes.

According to the Australian Petroleum Institute, the price of petrol "has largely been driven by rising international crude oil costs and the falling value of the Australian dollar".

The industry organisation insists that the country's big oil companies - BP, Caltex, Mobil and Shell - "do not profit from high crude oil prices", but are in fact "cushioning the Australian motorists from the full effects of rising crude oil prices".

Industry experts support this explanation. Rainer Wiek, a petroleum analyst with Energie Informationsdienst, a German trade magazine, said fuel shortages in the United States were to blame for the price pressure.

According to Mr Wiek, the wholesale price of unleaded petrol has risen sharply on Europe's largest market, in Rotterdam during recent weeks, and now bears no relation to price movements in the market for crude oil anymore.

US refineries were overstretched, he said, suffering from technical problems and a failure to shift their seasonal production cycle from heating oil to petrol.

As a result, US companies were now buying up large quantities of petrol in Europe, thus driving up prices.

Watchdogs investigate

Such arguments, however, do not cut with the oil firms' critics.

In Australia, the country's Competition and Consumer Commission (ACCU) has already pledged to act. "We'll ask them to explain why their prices went up".

The commission's chairman, Allan Fels, was quoted by an Australian newspaper as saying that oil companies might have "taken advantage of motorists at a vulnerable time".

In Germany, meanwhile, demands for a formal investigation are growing too.

Wolfgang-Ernst zu Ysenburg, president of AvD, a German motorists organisation, said the country's competition watchdog should investigate recent price moves.

He said prices had been raised "without a reason", putting an extra 80m Deutschmarks into the pockets of the oil giants.

Both government and opposition politicians supported demands for a formal investigation, saying the oil firms were testing "how far they can go".

German politicians disagreed, though, over whether to scrap a recently introduced "ecology tax", which adds about seven pfennigs to the price of a litre of petrol.

But the competition watchdog, the Bundeskartellamt, has already ruled out taking any action. A spokesman said the agency could act only if it had clear indications of price fixing.

It would not be possible to stop oil firms from "acting in parallel", he said.

-- Anonymous, April 17, 2001