Finalizing the “third” wave of cases against vertically-integrated oil companies. FAS Russia sums up the results

In 2007 - 2012 the Federal Antimonopoly Service (FAS Russia) carried out “three waves” of antimonopoly cases against vertically-integrated oil companies, that resulted in radical institutions chanted on the market. According to Anatoly Golomolzin, “one of the important changes is that according to FAS determinations oil companies were required to sell certain volume of oil products through an exchange”. In 2011, oil companies in total sold through oil-products exchange approximately 12% from the volume of oil products supplied to the domestic market, and FAS determinations required that no less than 10% of domestic supplies must be sold through exchanges Deputy Head of FAS Russia said that “we also started carefully monitoring and following-up the situation on related and external markets. The so-called net-back formula, that we discussed with you on a rather regular basis, has become common in assessment of the market situation”. On 1st March 2012, FAS signed an agreement with MICEX-RTS that these sites will provide information on a regular basis regarding net-back prices for eight most important oil products. The main subject of the agreement between the Antimonopoly Service and the exchange is cooperation between the parties, aimed at improving information transparency of market of oil and oil products in Russia. As commented earlier Senior Managing Director of MICEX-RTS, Roman Goryunov: “Oil indices of MICEX-RTS, that take into account not only the export element of Russian oil refining, but also wide geography and various types of products, will help the regulator to increase transparency of domestic market of oil products". Now FAS have a possibility to follow-up indices on a daily basis, which allows using such indicators to evaluate domestic market. Anatoly Golomolzin emphasized yet another important change on the market: exchanges started registering off-exchange contracts. “We have obtained possibility to follow-up three indices that characterize the situation on the wholesale market of oil products: off-exchange prices, exchange prices and net-back prices”, explained Deputy Head of the Antimonopoly Service. “Price arbitrage between these three indices gives adequate appraisal of the market value of oil products in the Russian Federation”. For already five years FAS conducts weekly monitoring of small wholesale and retail prices for oil products in all regions, monthly changes of wholesale mark-up, and in the last year FAS also started monitoring movements of oil products, in particular, giving assessment of the levels of stock and sale of oil products in the regions. “It enables us to forecast future changes of the situation and, if there is a threat of oil products shortage, to act jointly with the Ministry of Energy and the Federal State Reserve Agency, in particular, through commodity interventions”, explained Anatoly Golomolzin. The new basis for monitoring situation on the market creates stable background for in the current situation and for the future. “A quadripartite agreement between FAS, our colleagues from the Federal Agency of Technical Regulation and Metrology, and the Federal Service for Environmental, Technological and Nuclear Supervision with oil companies is of principal importance”, said Deputy Head of FAS Russia. The companies have unilaterally undertaken an obligation to modernize refining capacities, and the authorized bodies follow-up the situation within the scope of their reference. “We have warned that we will apply turnover fines and seize unreasonably obtained income of oil companies that fail to honour their obligations under the agreements”, emphasized Anatoly Golomolzin. “At the beginning of March we also concluded an agreement with the Federal Agency of Technical Regulation and Metrology, that encourages exchanging information between the parties regarding violations in sales of oil products, and such information should be corroborated by materials confirming the fact of violations”, stated Deputy Head of FAS Russia. In addition to quality control of oil refineries, FAS and the Federal Agency of Technical Regulation and Metrology coordinate their efforts for quality control of fuel filling stations. “In particular, the Federal Agency of Technical Regulation and Metrology plans to carry out several inspections in the near future. Based upon the findings of the inspections, sanctions can be applied within the scope of reference of the Federal Agency of Technical Regulation and Metrology, as well as measures specified by the antimonopoly law for unfair competition”, pointed out Anatoly Golomolzin.