Vitol fined over market manipulation: ACER warns budget cuts may leave future abuses undetected

France’s Energy Regulatory Commission (CRE) has fined Vitol €5 million for engaging in market manipulation in the gas market. But the EU’s Agency for the Cooperation of Energy Regulators (ACER) warned that unless its market monitoring resources are maintained similar abuses may go undetected in future.

CRE said that Vitol, an energy and commodities company, had engaged in market manipulations on the French Southern virtual Gas Trading Point between 1 June 2013 and 31 March 2014, in breach of the EU Regulation on wholesale energy market integrity and transparency (REMIT).

In 65 cases over 54 trading days Vitol had issued multiple sell orders at the beginning of the trading day, when liquidity was low. It issued sell orders at gradually decreasing prices during the more liquid period of the day.  Once prices had decreased, Vitol made its purchases and then it cancelled its sell orders to finish the day as a net buyer.

ACER highlighted the fine, noting that it comes three years after trade reporting obligations were brought into a data collection framework by ACER. But it warned that most of the framework, “which is starting to deliver its benefits in terms of detection of market abusive behaviour”, might have to be abandoned, because the Council of the European Union has proposed significant reductions in ACER’s budget for 2019.

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