Mr. Jeremy Godfrey:

I thank the Deputy. I will try to answer his questions but if I miss one, please let me know and ask it again. With the information we are gathering, we have been motivated to look at the matter by the recent very high level of public concern and anxiety over fuel prices. With the information we are gathering, as well as being able to assess collusion, we will get a better sense of what is happening to margins in the industry by looking at wholesale and retail pricing. When we have that sense and are in a position to provide an update, we will do so.

"Dominance" is a technical term that has much case law around what it means. In the case of the fuel sector, in the past we have looked at mergers and at the retail level the market is very local and not even as big as a county. We have tended to look at markets in urban areas as having a neighbourhood of approximately 3.2 km or 2 miles. In rural areas, we have tended to look at markets where people are willing to drive a little further to get a good deal on petrol. We looked at markets in those areas of approximately 5 miles or 8 km. Those issues in retail are, as one of the Deputy's colleagues alluded to, very local. There may be plenty of competition in one part of a county and perhaps less competition in another part. There are also markets for wholesale selling of fuel and importing fuel for services one gets at terminals. We looked at all of those with respect to mergers. There are several players and there is no evidence at all of one dominant player in those markets.

The definition of dominance is really quite extreme, with a company able to act without care and it does not matter what competitors do. The company does not need to care or worry about competitors or customers and it would have almost complete freedom to act. It is very rare to find dominance in any market. I would not want to say to the committee that issues of dominance in this market were very likely to be found. With the case law on excessive pricing and dominance, the courts have held that, really, the pricing must bear no relation whatever to the cost before they are willing to uphold an accusation of excessive pricing. We are not in that position in this market.