Brussels slaps massive fines on ‘mafia’ of energy majors

Sasol, Total, ExxonMobil and six others were fined €676 million yesterday (1 October) for participating in a cartel that for 13 years fixed prices of paraffin wax, a petrochemical product widely used for consumer goods like paper cups, candles and tyres. 

The companies involved in the cartel, dubbed the ‘paraffin mafia’, exchanged sensitive commercial information and essentially manipulated European markets for paraffin wax between 1992 and 2005, according to the Commission. Meetings were regularly held in top hotels across Europe.

“There is probably not a household or company in Europe that has not bought products affected by this ‘paraffin mafia’ cartel,” said EU Competition Commissioner Neelie Kroes, referring to a market valued at nearly €500 million per year.

Shell, which also participated in the cartel, blew the operation’s cover and has escaped fines after co-operating with European anti-competition authorities, who launched surprise inspections at company offices in April 2005. 

The companies involved and their respective fines are as follows (in millions of euros):

• Sasol (Germany) – €318
• Total (France) – €128
• Shell – fine set at €96 but reduced to €0 for cooperation 
• ExxonMobil – €83
• RWE (Germany) – €37
• ENI (Italy) – €29
• Hansen & Rosenthal (Germany) – €24
• MOL (Hungary) – €23
• Repsol (Spain) – €19
• Tudapetrol (Germany) – €12

The total fine is the fourth largest ever imposed by the Commission on any industrial sector in Europe. Kroes said she hoped the measure would “encourage the management of these companies and others to look very carefully at what their staff are doing” and that shareholders would in turn subject the management of the companies to greater scrutiny.

Sasol, which saw its fine doubled for leading the cartel, has already announced its intention to appeal the ruling. 

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