And, as the issue in question appears to be whether Platts prices have been manipulated by traders working for the major oil companies, it will be of vital interest to many forecourt owners as those Platts prices are what determine how much they pay for their fuel supplies.
The EC has released few details about its investigation other than to confirm its "officials carried out unannounced inspections at the premises of several companies active in and providing services to the crude oil, refined oil products and biofuels sectors".
It said: "The Commission has concerns that the companies may have colluded in reporting distorted prices to a price-reporting agency to manipulate the published prices for a number of oil and biofuel products." It refused to say which companies were involved but BP, Shell and Statoil in Norway all confirmed they had received visits and were "co-operating" with the review, as did Platts.
Statoil gave the clearest indication of the focus of the investigation when it disclosed: "The suspected violations are related to the Platts' Market-On-Close (MOC) price assessment process, used to report prices in particular for crude oil, refined oil products and biofuels, and may have been on-going since 2002."
The date is significant because in 2001 Platts changed its method of calculating prices. Up to this point it had produced a figure based on an average of deals over a period, while after that date it switched to a method based on prices prevailing at the close of the market.
Insiders suggest that restricting its assessment to deals done in a narrow time frame made it more vulnerable to manipulation than one based on a wider measure. They also point out that the rapid price fluctuations that forecourt operators really hate are in the interests of the traders, and those with long memories believe the market was much less volatile under the previous method.
However, Platts insists that its method of assessment gives the best take on the market, and its editors are wise to attempts to rig the market.
In its Methodology Guide it states: "Platts is always concerned about the potential effects of 'one-off' deals on the market's perception of transactable value. It is common practice among some traders to effect non-repeatable deals at below- or above-market levels in the hope that such deals will influence others' perceptions of value and ultimately in the hope that these deals will affect Platts assessments. A variant on this action is the practice by supposed sellers of 'gapping down' their offer to a point well below where a trade might be expected to occur, or of supposed buyers 'gapping up' their bids.
"The test that Platts uses is a process of inquiry to find whether, for example, an unusually high buyer is willing to pay the same amount again and again until all the supply created by his high bid is exhausted. On the reverse side, a seller would need to supply more barrels until he satisfies all the demand generated by a low offer. If a buyer or seller fails to satisfy the demand or supply generated in the entire marketplace, the transaction could be considered non-market and would not be used for the assessment."
All the dealers Forecourt Trader contacted welcomed the investigation. Susie Hawkins of Cheltenham-based Simon Smith Group said: "We were pleased when we heard it was being investigated. The volatility of prices has made it very difficult for us because it directly affects our costs.
"We get daily Platts prices and often they have gone up or down 1ppl and there's very little explanation of why. It can only be a good thing for everyone for consumers and for us."
Referring to the recent OFT inquiry into the road fuel market, she added: "We were disappointed with the outcome of the OFT inquiry, but its remit was quite narrow. Hopefully this investigation will settle the matter, one way or the other."
Stuart Giles of Golden Cross Group said: "I welcome this inquiry because the figures just do not stack up."
He, too, had been disappointed by the OFT findings, and said: "How could they look into something as complex as this in six weeks and then say there was nothing to be found."
Former PRA president Phil Richardson, of Park Road Group in Newcastle, said he was delighted by the decision to carry out the investigation.
He said: "I can see very little correlation between crude oil supplies and Platts' prices. Platts seems to be based on a few cargoes in Rotterdam when there is lots of other business going on elsewhere, so it has always seemed a fairly artificial figure."
As the buying price for dealers' supplies was based on Platts figures, however, he said that if there had been any market rigging it was likely to have had an effect on dealers' businesses.
He added: "Anything that makes the market more transparent and brings lower prices for us and consumers can't be knocked."
Unfortunately the European authorities are not renowned for the speed of their deliberations and the trade may have to wait some time for an outcome. The EC said there is no legal deadline to complete inquiries into anti-competitive conduct. The duration depends on the complexity of each case, the extent to which the companies concerned co-operate with the Commission and the exercise of the rights of defence.
argus wholesale prices now on Forecourt Trader website
Forecourt Trader's website, www.forecourttrader.co.uk, now publishes weekly wholesale prices on petrol and diesel from Argus Media, to complement the weekly pump prices that it already publishes.
The prices represent the previous week's average of Argus daily UK ultra-low sulphur diesel and Argus Eurobob gasoline in pence per litre. The prices are based on information provided to Argus during the full day on deals done in the wholesale market. The prices in Forecourt Trader thereby take all deals that have happened into account.
Argus says it has a clear and transparent methodology that explains how prices are assessed. This includes details of the specifications that determine which deals are considered when assessing the price, covering quality, timing and size (see www.argusmedia.com/methodology).
Josefine Ahlström, vice president, business development for Argus, commented: "Argus fully supports transparency in the commodity markets and as Argus is used significantly in the wholesale markets, we believe that retailers in the UK would benefit from gaining access to our prices. The objective is to help retailers understand wholesale price movements and how they impact on their profit margins."
Argus has 500 full-time staff spread across offices in each of the world's principal energy centres, and provides complete coverage of the wholesale market, enabling UK companies to monitor international price developments, and to respond quickly to changing markets. More frequent updates than the prices in Forecourt Trader are available through the Argus Direct web service, email or direct data feeds. For downstream fuels, prices for the following products are available:
automotive fuels (diesel and petrol);
industrial and heating fuels (heating oil and jet/kerosene);
biofuels (ethanol and biodiesel).