PREVENTED DISRUPTION OF THE HEATING SEASON IN THE AMUR REGION BECAME ONE OF THE BEST ACHIEVEMENTS OF FAS DEPARTMENT IN 2017
FAS Presidium recognized the practice of using coal price indices as one of the best achievements of the competition authority in state regulation of prices and tariffs
The competition authority investigated a statement from the Governor of the Amur region about a threat of disrupting the heating season in Tynda due to a sharp increase in prices for coal industrial product by the sole supplier.
In the course of an inspection, FAS established that the company was creating discriminatory conditions for supplying fuel (grade К, class 0-30) for housing-and-utilities enterprises in Tynda (100% advance payment, at the price 37% higher than for other consumers).
As a result, FAS issued a warning to Yakutia coal producer requesting to conclude a contract with Tynda housing-and-utilities enterprises for supplying coal under non-discriminatory conditions in comparison with other counteragents, particularly with regard to the payment deadlines, the base price of products without transportation costs.
FAS discussed warning execution at meetings with the Government of the Amur region, Tynda housing-and-utilities enterprises and the coal supplier. As a result the coal supplier and Tynda housing-and-utilities enterprises concluded a coal supply contract under non-discriminatory, mutually beneficial conditions, particularly, at a price 37 % below the earlier imposed price. The contract is concluded within the time limits enabling timely start of the heating season, which was of significant social importance.
To reduce the timeframe of antimonopoly response, FAS, in particular, used prices, price indices for coal industrial product based on information from St Petersburg International Exchange (“SPIMEX” JSC). They are formed on the basis of data about registering off-exchange supply contracts provided by coal companies. Under the frame of Sub-Committee for developing exchange trade with power-plant coal, formed in 2017, FAS held monthly meetings with coal companies on increasing the quality of registering such deals. Together with “SPIMEX” JSC the antimonopoly authority organized training workshops and distance consultations on registering off-exchange deals for coal supplies with 71 companies. FAS also investigated 37 administrative cases and imposed fines for over 3 million RUB.
“As a result of FAS efforts, the quality of registering off-exchange contracts for coal-supply is enhanced, and the number of companies that register off-exchange transactions increased from 62 to 99. From 2017, “SPIMEX” JSC publishes territorial price indices by coal grades that can serve as benchmarks to control observance of the antimonopoly law and tariff regulation, and can be used in public procurement to form initial prices. Off-exchange indices will help develop on-exchange trading with coal”, pointed out Head of FAS Department for Control over Fuel-and-Energy Complex and the Chemical Industry, Dmitry Makhonin.