“Gazprom Neft” OJSC is fined over 900 million Rubles for fixing monopolistically high prices for diesel fuel and aviation kerosene

27 december 2011 11:08
 

On 27th December 2011, the Federal Antimonopoly Service (FAS Russia) fined “Gazprom Neft” OJSC over 900 million Rubles as part of the “third wave” of antimonopoly cases against vertically-integrated oil companies.


Under Article 14.31 of the Code on Administrative Violations of the Russian Federation, FAS held the company administratively liable and imposed a multi-million fine – 979,293,414 RUB.


Earlier the Antimonopoly Service found that “Gazprom Neft” OJSC violated the antimonopoly law (Part 1 Article 10 of the Federal Law “On Protection of Competition”).


As “Gazprom Neft” OJSC voluntarily eliminated the violations, FAS did not issue determinations to stop violating the antimonopoly law.


“Gazprom Neft” OJSC abused market dominance by fixing and maintaining monopolistically high prices for diesel fuel and aviation kerosine in Q4 2010 – the beginning of 2011 and creating discriminatory conditions for activities of market agents.


Eliminating the consequences of the violation, “Gazprom Neft” OJSC admitted in writing the fact of violating the antimonopoly law and gave oral and written explanations regarding eliminating the violation and its consequences.


FAS points out that the company started undertaking certain actions to improve the situation on the market of aviation kerosine in mid-December 2010; since the beginning of February 2011 the company started changing its pricing policy for supplying fuel to the federal wholesale market of oil products. When on 15th February 2011, the Supreme Arbitration Court of the Russian Federation passed a precedent ruling regarding “Gazprom Neft” OJSC; the company radically changed its line of conduct and has been undertaking the necessary actions to protect competitive conditions.


The company switched to the fuel types that meet the requirements of the technical Regulations “On the Requirements for Motor and Aviation Petrol, Diesel and Marine Fuels for Jet-Engines and Residual Fuel Oil”. In the first six months of 2011 “Gazprom Neft” OJSC increased fuel supplies to domestic market by 20 - 40% in comparison with the similar period of 2010; in particular, in the challenging April - May 2011. “Gazprom Neft” OJSC put forward several initiatives to improve the rules for exchange trading with oil products. From 2011 the company began registering off-exchange contracts. “Gazprom Neft” OJSC executed its obligations for supplying fuel for the needs of agriculture at reduced prices.


FAS took the above-listed and other circumstances into consideration to determine the size of the administrative fine.


Currently FAS is considering administrative sanctions against “Lukoil”OJSC, and “TNK-BP Holding” OJSC.

 

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