Germany's Federal Cartel Office Wednesday said an ongoing investigation into Germany's gasoline and diesel market has found the market is dominated by a few companies and further expansion of this oligopoly is unlikely to get antitrust approval.

The regulator said the oligopoly comprising the "vertically and horizontally integrated" players Total SA (TOT), Royal Dutch Shell PLC (RDSA.LN), BP PLC (BP), ConocoPhillips (COP) and ExxonMobil (XOM) already controls a a large part of the German gasoline and diesel market.

The strong concentration of the market represents a "meaningful obstacle" to competition, the cartel office added.

"On all market levels there are structures that strongly dampen overall competition," the cartel office said in a written statement.

All of the named companies which comprise the oligopoly are active in retail as well as procurement and transport of gasoline and diesel, the cartel office said.

Due to the current market structure a further expansion of the dominant companies through mergers and acquisitions will in future be very difficult or approved conditionally, the cartel office added.

The regulator has a similar stance on the German electricity market, which is dominated by four utilities which concentrate more than 80% of the country's power generation capacity. The two dominant utilities E.ON AG (EOAN.XE) and RWE AG (RWE.XE) have such dominant market positions the cartel office has previously said they're effectively barred from further expanding their businesses in Germany.

As a first consequence of the gasoline and diesel market investigation the cartel office Wednesday decided to block plans by Total Deutschland GmbH, the German unit of Total SA (TOT), to acquire 59 filling stations from Austria's OMV AG (OMV.VI).

Total's plan to acquire the OMV filling stations would have given the oligopoly a market share of between 80% and 85% and would have eliminated OMV as "one of the strongest competitors," the cartel office said.

The cartel office further said it is still probing two other expansion projects Shell is pursuing.

Shell Deutschland Oil GmbH plans to acquire filling stations from the medium-sized companies Lomo and Honsel.

The deadline for the cartel office's decisions on these acquisition plans is June 9, it added.

The gasoline and diesel sector was initiated after the regulator received complaints from consumers and independent gas station operators who had repeatedly complained about how quickly major gas station operators react to price increases by competitors.

The cartel office Wednesday said the strong concentration of the market and its high degree of transparency favors the dominant companies rather than consumers.

The incumbents' marketing strategies to a large degree focus on differences in the quality of their products rather than pricing, the cartel office said. It added prices are generally more crucial in terms of competition.

The cartel office also criticized the existence of "certain price setting patterns" such as increases shortly before holiday seasons.

"These (price setting patterns) are often misunderstood by motorists as price fixing," the cartel office said.

It said it plans to present provisional results of the sector investigation "shortly."

Company Web site: www.bundeskartellamt.de

-By Jan Hromadko, Dow Jones Newswires; +49 69 29 725 503; jan.hromadko@dowjones.com