HE WHO LAUGHS LAST: - The Reykjavik Grapevine

HE WHO LAUGHS LAST:

HE WHO LAUGHS LAST:

Published July 25, 2003

THE OIL COMPANIES AND ICELANDIC BUSINESS

THE OIL COMPANIES AND ICELANDIC BUSINESS

For the past few days news of illegal price collaboration between the three main oil companies has dominated the Icelandic media, the latest in a long line of scandals relating to things such as insider trading, bribery, embezzlement and more. Not many years ago a report was published showing Icelandic companies to be some of the most honest and trustworthy in the world. Well, while that pretty image has been ruined, the revelation was not that we got so spoiled overnight, but rather that before, nobody bothered to check if something illegal was going on.

And when I think about it, it’s incredible that no one saw anything wrong with that pretty picture. In a small country where everyone knows each other and where a handful of companies rule the market, the birth of the Icelandic mafia seemed to go unnoticed. Among the first warning signs was price collaboration among the insurance companies. This was first brought to attention when a new insurance company emerged on the market, offering car insurance for only half of what everyone else was charging. The insurance mafia was quick to respond and lowered their price to match this new rival. Ecstatic over this, people praised the competition, but since they were getting the same price at their old insurance company nobody moved over, the new company got no business and quit.

And what happened then? Well, the price went up, and got higher than ever before.
And people just accepted this, and said nothing.

Icelanders don’t seem to be too bothered when they’re told that the oil companies might have stolen several billion krónur from them, sure we’re angry and shocked, but we all need to move on, some say, why cry over milk spilled and money lost? And even if the companies are fined, the money is going to the government and not back in our pockets.

There has been surprisingly little discussion about this, and the fact that this has been going on for years. Most people probably knew there was never any competition, there was something fishy about how all the oil companies charged exactly the same and raised or lowered their price always at the exact same time. But nobody really complained, and nothing was done.

As deafening in its silence has been listening to members of the government refuse to comment on the matter while members of the minority parties have been happy enough to give their opinion, and while most of them talk, rightly, about the incredibly low moral standards of the oil companies leaders, their political opponents seem to turn away in shame. The interesting thing here and the awkward part for the government is that the president of one of the oil companies is married to the minister of justice, the highest ranking woman in the government, and probably the least liked politicians in the country. The government seems to attract scandals, earlier this year, the prime minister accused the owner of one of the largest companies in the country of trying to bribe him, the accused said it was a joke because he had heard that the prime minister could be bought. After all, what kind of a politician promises one of his best friends the guarantee of the government for a loan of 20 billion to a company only worth 6 billion? The bribery matter died out in only a few days, and is long forgotten now. Much like this scandal will be in a few weeks.

I don’t think that this investigation now, however good and useful, is going to change anything in the long run, some companies may be fined, somebody might even go to jail. But the bottom line is that customers are going to get cheated as long as someone wants their money and thinks it’s possible.

And I’d love to go and say to the presidents of the oil companies that they can take their gasoline and pump it up their *****. But because lack of usable public transport forces me to own a car, and since the oil companies were all in on it together, I guess the joke is on me.

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