EU suspects ethanol price manipulation since 2007

Market: Biofuels, Oil products
20/10/14

The European Commission says price manipulation may have occurred since price reporting agency Platts introduced the market-on-close (MOC) methodology for ethanol in Europe in 2007.

"The European Commission suspects that the agreements and/or anti-competitive practices could have started from 2007 when the MOC method was introduced in Europe for ethanol and to possibly still be in course now," reads a document that authorised unannounced inspections by the commission this month.

The commission made the unannounced inspections on 7 October at unnamed ethanol production, distribution and trading companies in two EU countries, it said on 9 October. Sweden-based ethanol producer Lantmannen-Agroetanol later said that its offices in Norrkoping, Sweden, were inspected.

The commission's 7 October inspections focused on Platts' market-on-close (MOC) methodology and eWindow. The commission's authorisation document said it is possible that Alcogroup, and Alcodis and Alco Bio Fuel, could have reached agreement with other companies in order to manipulate Platts' reference values.

"The smallest distortion of prices evaluated by Platts for a given product considerably changes the price at which large volumes of this product are sold under long-term contracts," the commission document said.

Such practices could have favoured the commercial positions of Alcogroup and subsidiaries or companies with which Alcogroup may have been suspected to have entered into agreement, it said. No comment was available from the company.

The commission has "indications" that Platts was able to prevent one or more companies from participating in the process of evaluating prices under the MOC method and from joining Platts' eWindow.

"The commission suspects Platts of having adopted this behaviour either independently or in agreement with Alcogroup and aforementioned subsidiaries and/or with other companies taking part in Platts' price evaluation under the MOC method," the document said.

"We cannot comment on the content of the commission document referenced in media reports as we have not been provided with it," Platts said. "Platts was not a subject of the commission's unannounced inspections on 7 October."

This month's inspections follow those undertaken by the commission and Norwegian authorities in May 2013 at several companies including BP, Shell, Norway's state-controlled Statoil and Netherlands-based trading firm Argos Energies, as well Platts, to investigate alleged collusion to manipulate published prices for crude, oil products and biofuels.

There is no legal deadline for the commission to complete inquiries.

Argus competes with other organisations such as Platts and Icis in publishing market reports, news and other information on energy markets, including price assessments.

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EU suspects ethanol price manipulation since 2007

Related news posts

IEA ups global crude runs forecast, driven by OECD

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Commodity rail shippers push for more train data

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