A judge who fined an oil company £1,000 (€1,270) for a breach of the Competition Act 1996, in the first criminal prosecution of its type, said people in Ireland did not know what was going on in petrol stations.

"There is a lot going on behind the scenes about how petrol prices are arrived at which we do not know anything about," Judge Tom O'Donnell said at Limerick District Court yesterday.

He imposed a fine of £1,000 and £130 expenses on Estuary Fuel Ltd, O'Curry Street, Limerick, after it pleaded guilty on two counts. It was prosecuted on two summonses of undertaking and implementing an agreement entered into with Kelliher's Garage, Tralee, Co Kerry, on June 9th, 1999, which had as its object the restriction or distortion of competition in trade in goods, contrary to Section 2 of the Competition (Amendment) Act 1996 and the Competition Act 1991.

The court was told that it was a condition of the agreement between the parties that Kelliher's Garage did not reduce its retail price of diesel below 51.9p per litre and the price of unleaded fuel below 55.9p per litre unless there was a reduction in Estuary Fuel's schedule price. Ms Una Brady, an economist and senior analyst with the Competition Authority at the time, said she was responsible for examining complaints and breaches of Section 4 of the Act and by June 1999 there were 26 price-fixing complaints regarding motor fuels. The investigation was started after complaints from a petrol retailer and the general public.

She said that Kelliher's Garage had problems obtaining supplies, but it eventually obtained a six-month contract with Estuary Fuel Ltd for supplies. The selling price at the pump was agreed to be 51.9p per litre for diesel and 55.9p per litre for unleaded petrol. This restricted the retailer from determining the price of his own product and was damaging to competition. Estuary Fuel was not entitled to do this under the Competition Act.

Ms Brady said that because of the agreement, there was no competitive pressure and competition lowered the prices for consumers. She revealed that the agreement was to stay in place until December 31st 1999 and in October 1999, the managing director of Estuary Fuel, Mr Tim O'Donoghue, wrote to Kelliher's terminating the clause between the parties.

Mr Patrick O'Reilly BL, for the Competition Authority, put it on record that this was the first criminal prosecution of its kind taken by the Competition Authority.

Imposing a fine of £500 on each summons, Judge O'Donnell said it was a serious matter, as it distorted competition. He said he was taking into account that there was no previous conviction against the company and he accepted that court time was saved by a guilty plea.