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The Serious Fraud Office ‘urgently reviewing’ oil price inquiry

UK fraud authorities are “urgently reviewing” whether to launch an investigation into companies that may have rigged the oil market and driven up petrol costs for millions of drivers.

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By Rowena Mason and Christopher Hope: 7:06PM BST 16 May 2013

The Serious Fraud Office said it is considering an inquiry, after European Commission officials raided the London offices of BP and Shell. The companies, along with a Norwegian oil giant, Statoil, are suspected of having “colluded in reporting distorted prices to manipulate the published prices for a number of oil and biofuel products”.

It comes the day after David Cameron said he wanted to see prosecutions with the “full force of the law” if the allegations are proven.

Ministers are under pressure for British authorities to launch their own investigation as there are fears that motorists could have been duped into paying thousands of pounds too much for petrol over the past decade.

MPs have demanded to know why the European Commission has launched an inquiry, while the UK’s own Office of Fair Trading pronounced the petrol market to be “working well” earlier this year. The OFT also said it found no “credible” evidence of any oil price manipulation.

Robert Halfon, an MP and petrol price campaigner, today asked the SFO to consider whether it had scope to mount a British inquiry in parallel to the European one.

“The Prime Minister has said through his spokesman and the Energy and Climate Change Secretary has confirmed in Parliament that the Government expects the firms involved to comply with the investigation and if found guilty, they should face the full force of the law,” he wrote to the SFO head David Green.

“Action by the European Commission may be helpful, but it is no subsitute for domestic action by Britain’s authorities. Does the Serious Fraud Office have scope to investigate allegations of market abuse and price-fixing by oil companies?”

Tonight, an SFO spokesman confirmed its officials are considering whether they should get involved.

“Subject to discussions with other agencies as to the potential offences involved, it is likely that the SFO could be the appropriate authority to investigate allegations of price-fixing,” a spokesman said.

“We are urgently reviewing the matter and would expect to announce any decision to accept the case for criminal investigation if and when such a decision is made.”

Oil executives could be investigated under the same powers the SFO used to probe bankers over the pricing of Libor – a key interest rate used as a benchmark to calculate mortgage payments. The authorities have arrested at least three people in connection with that scandal.

The Prime Minister has also said he will urgently look at “extending criminal offences” to make it easier to bring prosecutions against anyone who has manipulated the energy market.

His comments raised the prospect that any companies who are found to have manipulated household gas or electricity prices could also face criminal prosecution.

However, his spokesman today admitted that any change in the law would be forward-looking, and would not be able to hold account any executives caught up in historic fixing of the oil price.

The Prime Minister’s spokesman said: “Following the Libor scandal, the Government legislated to create a new criminal offence and a manipulation of all types of benchmarks.

“This law was done in such a way that other benchmarks could be included, and that would be a change in secondary legislation. Other offences including energy market manipulation could be added in if necessary.”

Any companies proved to have fixed the oil price could also face heavy financial penalties. Mr Cameron’s spokesman said the European Commission “can impose a fine of 10 per cent of the overall turnover of the company”.

The European Commission has emphasised that its investigations are in a “preliminary” stage and no anti-competitive practice has been proven.

BP, Shell and Statoil have said they are co-operating with the authorities but cannot comment further while the European Commission inquiry is active.



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