Showing posts with label wax. Show all posts
Showing posts with label wax. Show all posts

October 9, 2008

Shell learn the lesson Quick- Wax Cartel Exposed

Shell , who was the ring leader in fixing the price of bitumen and was fined by the European commission earlier learnt the lesson quickly and acted like the informer and got the way out. May be Shell could not make much out of paraffin wax and has decided to expose the cartel , himself to the EU Commission.

Hungarian oil and gas company MOL was among nine companies fined a total of EUR 676 million last week for forming a cartel to fix prices of paraffin wax. The French oil giant Total was fined EUR 128 million and US company ExxonMobil was hit for EUR 83.5 million by the European Commission.

Other firms given fines were Repsol of Spain, Italy’s ENI, Tudapetrol, Hansen and Rosenthaland, German RWE. For its part in the market-distorting racket, MOL was fined EUR 23.7 million.

Shell was granted immunity from any penalty for being the first member of the cartel to snitch on its co-conspirators to the European Commission. The South African oil company Sasol got the largest fine, EUR 318 million, for acting as ringleader. This whopping penalty came was even after the sum was reduced considerably following the company’s cooperation with the Commission.

The price fixing in the paraffin wax sector is alleged to have taken place between 1992 and 2005. Paraffin waxes, a by-product of the petrochemical industry, are used in everything from candles, paper cups and packaging to ski lubricants and the coating of cheeses such as Edam.

“There is probably not a household or company in Europe that has not bought products affected by this paraffin mafia cartel, with all that implies in terms of paying over the odds, higher costs and economic damage,” said the EU Competition Commissioner Neelie Kroes when the Commission announced its penalty last Wednesday.

The companies involved controlled some 75% of the European market for paraffin wax for 13 years. The fines were the fourth largest ever imposed by the commission. In February this year the Commission fined Microsoft a record EUR 899 million for defying a 2004 antitrust ruling.

“MOL has yet to study the final decision and has a period of two months in which to reflect on the findings of the decision and in order to determine whether to lodge an appeal with the Court of First Instance in Luxembourg,” ran the company’s quickly drafted press release.

Exxon was slightly more self critical, though far from penitent, saying it “deeply regrets its involvement, although limited, in the infringement of competition laws through the participation of a few of the company’s former employees”.