DMITRY MAKHONIN: EXCHANGE INDICATORS ARE NEEDED IN ANTIMONOPOLY REGULATION AND USED TO ASSESS TARIFF POLICY FAIRNESS

Head of FAS Department for Regulating the Fuel-and-Energy Complex and Chemical Industry outlined FAS plans for developing oil and oil products markets

Dmitry Makhonin took part in the session on the “Forward Market Ecosystem – the Prospects and Points of Growth” at the “Commodities Exchange Markets” Annual International Forum organized by SPIMEX.

He reminded about drafting a new Competition Development Plan that will be designed for digitalization. “Exchange is a digital platform”, pointed out Dmitry Makhonin, talking about the role of this competition development tool in the new Plan. According to Mr. Makhonin, the new document includes plenty of measures to promote trade.

Head of FAS Department for Regulating the Fuel-and-Energy Complex and Chemical Industryinformed about selling oil products through exchange trading: the share of secondary market is decreasing and the buyers structure is changing –large industrial companies enter trading and their share is increasing.

In his view, the mechanism of commodities supply operator has proved to be efficient: “We see 8 times increase of trading figures”.

Regarding small wholesale,Dmitry Makhonin mentioned that the Government- approved Road Map on developing exchange trade puts special emphasis on it.

“So far it’s a gray segment. We endeavour to create transparent indicators in this sphere”, stressed Head of FAS Department for Regulating the Fuel-and-Energy Complex and Chemical Industry.

Development of the futures market is another area of prospective work.

“We have concluded that exchange price indicators are necessary not only in antimonopoly control but are included in regulatory documents and are used to assess whether tariff regulation is fair”, pointed out Dmitry Makhonin.

Among the achievements in developing the oil and oil products market, Head of FAS Department for Regulating the Fuel-and-Energy Complex and Chemical Industry mentioned deregulation of the liquefied hydrocarbon gas market (LHG), where the market continues normal performance based on exchange prices after the state regulation is ended.

“The key task for FAS and for the Exchange is to expand the indicators list, particularly with regard to LHG, to fulfill the goals set by the Government”, concluded Dmitry Makhonin.

Other indices to be expanded: organizing spot trading in the “Surgut” and “Perm” “pricing points”; changing the methods for regional on- and off-exchange price indices for oil products in all regions of Russia; off-exchange small wholesale price indices for oil products; on- and off-exchange price indices for marine fuels in the largest ports; territorial and national off-exchange price indices for petroleum bitumen; off-exchange price indices for aviation fuel in the largest airports.

Finally Dmitry Makhonin described changes in regulatory control. For instance, changes of the rules and procedures of registering off-exchange contracts, are drafted and submitted to the Government, the provisions on regularity and evenness of commodities sale through the Exchange will apply to all commodities.

He underlined that “Canons are the same for everybody”.