Turkish Competition Board Conditionally Cleared Petrol Ofisi’s Acquisition of BP Turkey

1. Parties to the Transaction and Relevant Markets

The transaction concerns the acquisition of all shares in BP Turkey by PO, which is controlled by Vitol Netherlands Coöperatief U.A. (“Vitol”). Vitol is a global energy company engaged in the trading of crude oil, LPG, natural gas, and various energy products. In Türkiye, Vitol operates through PO, Vitol Enerji, and Vava Cars. PO has an extensive nationwide downstream network covering fuel and LPG distribution, storage, retail fuel operations, and lubricants manufacturing. BP Petrolleri A.Ş. (“BP A.Ş.”) is active in the distribution and sale of gasoline, diesel, fuel oil, kerosene, and autogas LPG across Türkiye. Retail sales are conducted through a network consisting of both company-operated stations and dealers working under dealership agreements. BP A.Ş. currently operates 773 fuel stations nationwide. Its key asset in storage operations is the Çekisan Antalya Terminal, which it jointly controls with Shell & Turcas Petrol A.Ş. (“Shell”).

The Board assessed the fuel and LPG sectors as a regulated, licence-based value chain composed of several distinct layers, including storage, distribution, retail sales, supply, and biodiesel sales. Due to the products’ chemical characteristics, their intended uses, and the licensing and technical requirements governing these activities, both demand- and supply-side substitutability were found to be limited. Accordingly, each activity was treated as a separate relevant market for the purposes of the Board’s analysis.

Storage Markets: The Board found that distributors’ sales obligations and national stock requirements make storage capacity indispensable, while storage services offered to third parties constitute an independent commercial activity. At the Ataş and Çekisan terminals, there is no product-based price differentiation and no technical need for product separation; by contrast, LPG storage requires distinct safety measures and licensing conditions, and therefore constitutes a separate activity. In this context, the relevant product markets were defined as “fuel storage services” and “LPG storage services.” The geographic market for fuel storage was limited to the Mediterranean Region, whereas the Board considered it unnecessary to define a geographic market for LPG storage.

Distribution Markets: The distribution activity covers wholesale sales to dealers, sales to free users, and inter-distributor trading. Because demand-side substitutability between gasoline, diesel, fuel oil, kerosene, and autogas LPG is limited, each product was treated as a separate relevant market. In line with the European Commission’s decisional practice[3] and the Board’s recent case law[4], the relevant product markets were defined on a product-by-product basis as “gasoline distribution,” “diesel distribution,” “autogas LPG distribution,” “fuel-oil distribution,” and “kerosene distribution.” For all product markets, the relevant geographic market was defined as Türkiye.

Retail Markets: In line with the European Commission’s practice[5], the Board distinguishes retail sales based on customer type, separating B2B and B2C transactions. B2B sales refer to discounted and contract-based fuel sales made to fleet and public-sector customers, typically through vehicle identification systems. B2C sales, by contrast, represent spot retail sales made at pump prices. At the retail level, the Board defined the relevant product markets as “B2B gasoline retail sales,” “B2B diesel retail sales,” “B2C gasoline retail sales,” “B2C diesel retail sales,” and “autogas LPG retail sales.”

For B2B retail, the Board found that contract terms, discount structures, and the breadth of station networks influence customer preferences at the national level, and therefore defined Türkiye as the relevant geographic market. For B2C retail, the Board adopted a more granular approach: it first examined competition at the province and district level, and then applied catchment areas to more accurately capture local competitive dynamics. Catchment areas were defined using a 5 km radius in metropolitan districts and other major urban centers, and a 20 km radius in rural districts.

The Board also treated motorway stations as a distinct geographic market. Due to limited entry and exit points, high investment and rental costs, and the additional time and monetary costs associated with toll roads, competition conditions on motorways were considered materially different from those applying to off-motorway stations.

Supply Markets for Fuel and LPG: Since Vitol supplies crude oil, petroleum products, and LPG to refineries and distributors in Türkiye, and BP sources products from abroad to support its distribution operations, the Board identified a vertical relationship between the parties. Consistent with its previous decisions[6], the Board treated fuel supply and LPG supply as separate product markets. For both markets, the relevant geographic market was defined as Türkiye.

Biodiesel Market: Biodiesel is used by blending it with diesel, and it differs from other biofuels in terms of its production method, licensing regime, and areas of use. As no meaningful substitutability exists with other biofuel types, the Board defined the relevant product market more narrowly as “biodiesel sales”, rather than a broader biofuels market. The relevant geographic market was again identified as Türkiye.

2. The Board’s Assessment and Stakeholder Views on the Transaction

The Board assessed the notified transaction across fifteen distinct relevant product markets, covering the supply, storage, distribution, and retail levels of the value chain. The review focused on both horizontal and vertical effects, with particular attention to the diesel and kerosene distribution markets, where the transaction was expected to result in a significant increase in concentration.

In its horizontal effects analysis, the Board found that PO already held a leading position in the diesel distribution market prior to the transaction. The acquisition of BP would substantially increase the combined entity’s market share, strengthening its position vis-à-vis its closest competitors. Given the market’s high volume and import-dependent structure, diesel was characterized as strategically important for preserving effective competition. The Board also noted that the post-transaction increase in the HHI exceeded the thresholds set out in the Guidelines on the Assessment of Horizontal Mergers and Acquisitions (“Horizontal Guidelines”). On this basis, the Board concluded that the diesel distribution market raised significant unilateral effects concerns due to the concentration increase resulting from the transaction.

The kerosene distribution market is already narrow in scope due to quota restrictions and supply limitations, with TÜPRAŞ’s Kırıkkale Refinery serving as the sole source of supply. The Board observed that PO held the largest market share in this market even before the transaction. Following the acquisition of BP, the combined entity’s market share would surpass the 50% threshold referenced in the Horizontal Guidelines for establishing dominant position concerns. The Board also noted that the kerosene market was highly concentrated even pre-transaction, and that the transaction would further intensify this concentration. In light of the combined entity’s strengthened market power, the Board concluded that the transaction could significantly impede effective competition in the kerosene distribution market.

In the gasoline distribution market, the Board noted that Shell held a leading position prior to the transaction, and that PO’s acquisition of BP would elevate the combined entity to second place, while Shell would remain the market leader. For this reason, the Board did not expect any anticompetitive effects to arise in the gasoline distribution market.

In the autogas LPG distribution market, Aygaz maintains a strong position and the market structure is highly fragmented, with numerous distributors active nationwide. The increase in concentration post-transaction remained below the thresholds set out in the Horizontal Guidelines, and the Board therefore did not identify any competition concerns in this market. Similarly, in the fuel-oil distribution market, BP’s limited presence meant that, although the combined entity’s market share would increase after the transaction, the change in HHI would remain modest, and Opet would continue to hold the leading position. Accordingly, the Board found no indication of anticompetitive effects in this market.

The Board emphasized that storage capacity is a crucial competitive parameter in the fuel sector. In the diesel market in particular—where imports play a significant role—storage capacity directly affects both cost structures and security of supply. The Board noted that the transfer of BP’s storage assets to PO could further strengthen the combined entity’s position in certain regions.

In the retail markets, the Board applied a catchment-area methodology, recognizing that competition takes place at the local level. Using a radius of 5 km in metropolitan districts and 20 km in rural districts, the Board identified 61 catchment areas in which market-share thresholds were exceeded and where the transaction could significantly reduce effective competition. Motorway stations were assessed separately, as their competitive dynamics differ due to high establishment costs, regulatory constraints, and sequencing rules governing station placement. The Board noted that competition on motorways is shaped primarily by distance-based and sequencing considerations. With respect to B2B retail sales, the Board considered that commercial customers are generally more price- and contract-sensitive, and that large buyers possess considerable bargaining power. For these reasons, any unilateral effects arising from the transaction were expected to be more limited in the B2B segment.

The Board observed that the diesel and kerosene distribution markets are characterized by high entry barriers, driven by factors such as substantial investment requirements, minimum sales obligations, the need to establish and maintain a dealer network, strong brand recognition, and access to adequate storage capacity. In addition, due to exclusive purchasing obligations, both dealers and B2C customers were considered to have limited buyer power. Taken together, these factors led the Board to conclude that the transaction could significantly impede effective competition in the diesel distribution market, the kerosene distribution market, and in certain retail catchment areas.

From a vertical effects perspective, the Board took into account Vitol’s activities at the fuel and LPG supply levels. However, given Vitol’s limited market shares in these upstream markets, the vertical relationship with BP’s distribution activities was not considered to create a foreclosure risk for downstream competitors. The Board further noted that the individual exemption previously granted for PO’s joint venture with Ege Enerji[7] includes a requirement that at least 50% of production be allocated to competitors. This obligation was regarded as an additional safeguard that mitigates vertical competition concerns arising from the transaction.

The transfer of shares in Ataş and Çekisan was assessed within the scope of non–full-function joint ventures and therefore was not considered an acquisition under Article 7 of Law No. 4054 on the Protection of Competition (“Law No. 4054”). Instead, these transactions were examined as a form of cooperation within the meaning of Article 4 and were evaluated under individual exemption criteria pursuant to Article 5. The Board concluded that the planned investments and operational improvements at both facilities would generate efficiency gains, cost advantages, and enhanced security of supply. On this basis, it found that all conditions for individual exemption were met.

3. The Board’s Assessment of the Commitment/Remedy Package

After concluding that the acquisition of BP by PO could significantly impede effective competition in the diesel distribution, kerosene distribution, and certain B2C retail catchment areas, the Board conducted a detailed assessment of the commitment package submitted by PO.

The package included a combination of structural and behavioural commitments designed to address the competition concerns identified in the markets where the risks were most pronounced:

Under the structural commitments relating to B2C retail sales, PO committed to divesting 50 stations located within the 61 catchment areas where the Board had identified significant local concentration concerns, and to refraining from entering into dealership agreements with these stations for a period of five years. In addition, PO undertook to divest at least 65 further stations, to be selected from a broader list of 220 stations, irrespective of their catchment areas. The Board found that, taken together, these commitments would result in the divestiture of 115 stations in total, and considered this sufficient to alleviate the competitive concerns identified in the affected local retail markets.

The behavioural commitments concerning storage capacity were designed to mitigate the risk of unilateral effects in the diesel distribution market. PO committed not to terminate the existing contracts of current capacity users at the Ataş and Çekisan terminals in which it will become a shareholder. In addition, PO undertook not to exceed 50% of capacity at Ataş and 52% at Çekisan for a period of three years. PO also declared that it would vote against the reactivation of the Çekmece and Ambarlı terminals, in which BP holds shares. The Board found that these commitments effectively preserve pre-transaction market conditions and adequately eliminate the unilateral effects concern identified in the diesel market.

Under the behavioural commitment relating to the kerosene distribution market, PO undertook not to exceed the 2023 sales volume of 606 tonnes for a period of three years, taking into account that the combined entity’s market share would surpass the 50% threshold post-transaction. The Board considered this commitment sufficient to neutralize the impact of the increased concentration in the market.

PO also committed to submitting compliance reports to the Authority every six months. Assessing the structural and behavioural commitments as a whole, the Board concluded that they were adequate, proportionate, and feasible to address the competition concerns arising from the transaction. Accordingly, the Board granted conditional clearance under Article 7 of Law No. 4054.

The decision also reflects the views submitted by sector stakeholders regarding PO’s acquisition of BP. Stakeholders expressed concerns that the transaction could affect competition both at the provincial level and within specific commercial zones, noting that PO’s already dense station network would become even stronger with the addition of BP’s stations. Several stakeholders emphasized that the combined entity would gain a significant advantage, particularly in the diesel and kerosene markets. On storage capacity, many industry representatives warned that the transfer of BP’s storage assets to PO could reduce competitive pressure, especially in regions with capacity constraints. They stressed that storage capacity is a critical competitive parameter during periods of high demand, and reported instances in which PO had declined third-party requests for access to storage facilities. Others, however, considered storage—particularly LPG storage—to remain competitively structured. Stakeholders also commented on B2B sales, highlighting that customer demand, network coverage, and commercial terms are key determinants in this segment; that B2B and B2C sales constitute separate markets; and that B2B customers, due to long-term contracts and price flexibility, may be more willing to switch suppliers. Finally, stakeholders underscored that local competitive dynamics differ across metropolitan districts, rural areas, and motorways: population density and travel times shape competition in urban centers, whereas station distance and sequencing are the primary competitive factors on motorways.

4. Conclusion

The decision provides a comprehensive assessment of the horizontal and vertical effects that may arise from the transaction, taking into account both the structural characteristics of the fuel and LPG sectors and the distinct competitive dynamics that operate at the local and national levels. The Board identified heightened concentration risks in strategically important markets such as diesel and kerosene, and conducted an in-depth analysis of structural issues that could weaken competitive pressure—particularly in local retail markets. While the commitment package submitted by PO incorporates both structural and behavioural remedies aimed at addressing these risks, the dissenting opinion highlights ongoing concerns regarding the overall magnitude of the concentration and the competitive implications of the combined entity’s control over critical infrastructure.

The dissenting opinion argues that PO’s acquisition of BP would significantly impede effective competition within the meaning of Article 7 of Law No. 4054, and that the commitment package accepted by the majority was insufficient to remedy the competitive concerns raised by the transaction. The dissenting opinion highlights several factors, including the structure of the market, the level of power the combined entity would attain, the closeness of competition between the parties, the combined entity’s critical infrastructure advantage in the diesel market, the negative feedback submitted by sector stakeholders, and the quantitative and qualitative shortcomings of the proposed commitments. According to the dissenting opinion, the sector functions as a tight oligopoly, with PO, Opet, and Shell together accounting for approximately 67% of the market. Following the acquisition, PO’s market share would increase to around 32%, leaving its two closest competitors—each with shares in the 20% range—significantly behind. Considering that PO operates roughly 2,000 stations and BP around 700, the combined entity would reach a network of approximately 2,700 stations, a scale and geographic reach that, in the view of the dissenting opinion, would likely reduce competitive pressure across the country. In the diesel distribution market, the dissenting opinion considers the combined entity’s position particularly problematic. When PO’s storage capacity, BP’s usage rights at the Ataş terminal, and Vitol’s role in enabling import opportunities are taken together, the merged entity would attain a stronger and more advantageous position than its rivals. The dissenting opinion’s central criticism concerns the limited impact of PO’s structural commitments. The divestiture of 115 stations within four years amounts to only 4% of the combined entity’s 2,700-station network, while the 175,500-tonne sales volume to be divested corresponds to merely 1–2% of total fuel sales. Moreover, the commitments do not restrict the integrated PO–BP entity from opening or acquiring new stations during the same period. Given PO’s financial strength and brand recognition, the dissenting opinion considers that the divested stations could be “easily replaced” through new expansions. For these reasons, the dissenting opinion concludes that the commitments are insufficient to meaningfully reduce market concentration and lack a sustainable competitive impact.

In this respect, the Board’s majority decision to grant conditional clearance on the basis of the proposed commitments stands as an important example of both the role of commitment mechanisms in competition law enforcement and the multi-layered nature of merger review in the energy markets.

[1] Attorney Gülce Korkmaz is the external competition law consultant of Baş | Kaymaz Law Firm. After completing her master’s degree at Bilkent University, she is currently pursuing her doctoral studies in the field of competition law at the Faculty of Law of Lüneburg Leuphana University (Germany) as a PhD researcher with the scholarship of the Joachim Herz Foundation.

[2] TCB Decision dated 12 September 2024 and numbered 24-37/885-379. For the Board’s reasoned decision on the case, please see here (only available in Turkish).

[3] For the European Commission decisions cited in the case, please see: Case No. M.9626 – PKN Orlen / Energa, para. 36; Case No. M.7318 – Rosneft / Morgan Stanley Global Oil Merchanting Unit, para. 14; Case No. M.4934 – Kazmunaigaz / Rompetrol, para. 6; Case No. M.9014 – PKN Orlen S.A. / Grupa Lotos S.A., para. 165.

[4] The TCB decisions cited in the case are as follows: (i) the decision dated 11.01.2018 and numbered 18-02/20-10, (ii) the decision dated 12.03.2020 and numbered 20-14/192-98, and (iii) the decision dated 27.10.2016 and numbered 16-35/591-260.

[5] For the European Commission decision cited in the case, see Case No. M.7603 – Statoil Fuel & Retail / Dansk Fuels.

[6] The TCB decisions cited in the case are as follows (i) the decision dated 13.04.2023 and numbered 23-18/341-113 and (ii) the decision dated 19.12.2019 and numbered 19-45/769-331.

[7] The TCB’s decision dated 15.08.2024 and numbered 24-33/780-327.

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