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Scottish Fuels co-operating with “dominant abuse” probe    22/1/13

Oil wholesaler Scottish Fuels does not believe that the the Office of Fair Trading (OFT) preliminary investigation into its locked-in contracts with retail petrol stations will develop into a full blown probe.

The OFT says the investigation relates to a suspected abuse of the firm’s dominant position in the Western Isles.

Scottish Fuels gave financial incentives, including rebates, to pump operators to tie them into five year contracts. The agreements required signed-up outlets to buy from Scottish Fuels.

The OFT says the investigation relates to a suspected abuse of the firms dominant position in the relevant market.

The government watchdog will examine if the contracts were anti-competitive and designed to hamper any rival oil company from competing fairly in the islands.

Last year, the OFT ended its review into road fuel price differences between the Western Isles and the mainland and concluded that no further action was necessary.

The current preliminary investigation is not related to its previous pricing review.

A Scottish Fuels spokesperson said: “The investigation is at a very early stage. The OFT has made a number of requests for information to relevant parties, and there is no reason at this stage to believe that it will proceed further to a full investigation.

“GB Oils (the parent firm of Scottish Fuels) is co-operating fully with the OFT to assist them with their assessment as to whether to launch a full investigation into whether there has been an infringement of the Chapter II prohibition.

By the end of next month the OFT will issue requests to filling stations and Scottish Fuels to provide information and gather any evidence which may help the inquiry.

In March it intends to analyses and review these responses. It will hold  "state of play" meetings with the various parties including Scottish Fuels to discuss the progress of the case, highlight key issues and receive further information.

By April, the OFT hopes to be in a position to decide whether to take any further action or close the case.

The OFT highlighted: “This case is at an early stage and no assumption should be made that there has been an infringement of competition law.”