FAS shall not apply price regulation of tariffs for pilot services in Russian ports

The FAS Board decision enables pilots to independently determine the rates for their services but will not relieve then of the obligation to report to the government on their decisions

On 1 June 2017, FAS Board approved a FAS Order “On changing regulation of operation of pilot organizations in the seaports of the Russian Federation”, that abolishes government price regulation of natural monopolies, which render piloting services in Russian seaports. Upon the Order coming into effect, the state will stop setting tariffs for pilot operators but will monitor prices and compliance of natural monopolies with the Information Disclosure Standards.

Deputy Head of FAS Alexander Red’ko commented the decision of FAS Board: “The analysis of the state of competition conducted by FAS showed sustainable  intraspecific competition between pilot organizations. The market is characterized by low market entry barriers, which encourages further growth of the number of economic entities, development of competition between them and enhancement of the quality of services offered to consumers”.

FAS points out that “Rosmorsport” must device and adopt a separate system of costs accounting that excludes cross-subsidizing between regulated and non-regulated segments.

Deregulated organizations will not be excluded from the Register of natural monopolies; they still are obligated to submit quarterly to FAS information on the tariffs set for the services. Thus, there will be protection from abusing dominance.