FAS HAS DEFINED NEW PRINCIPLES FOR THE SALE OF PETROCHEMICAL PRODUCTS

FAS has sent recommendations to the largest petrochemical enterprises. In the letter, the Authority indicated compliance with the principles of responsible pricing for petrochemical products**.

Companies are recommended to take measures to prevent unjustified price increases for goods in the domestic market, including by not using foreign price indicators in pricing, linking prices to foreign exchange rates.

Linking to netbacks can lead to an increase in the cost of production both for consumers who use raw materials in their production activities and for citizens who are the final consumers of goods.

As an alternative to netback, the Authority suggests using Russian stock and over-the-counter indicators.

The advantage of their use is transparent pricing, which allows companies to build long-term contractual relations based on the formed price of goods, which will guarantee the predictability of prices and ensure the saturation of the domestic market. This, in turn, will protect Russian consumers from a significant increase in cost.

The recommendations apply to the entire distribution chain - from sales of raw materials to finished products.

FAS also suggests changing companies' trade policies. They should indicate the priority of supplies to the domestic market, prices and the order of their formation.

Compliance with the recommendations of Federal Antimonopoly Service will prevent unjustified price increases in such socially important industries as construction, housing and communal services and agriculture.

Reference:

*Netback (export parity index) – the selling price minus the cost of delivery to the buyer.

** Polyethylene terephthalate, ammonia, apatite concentrate, sulfur, toluene, paraffin, methyl tert-butyl ether, rubber, petroleum orthoxylene, benzene, propylene, styrene, ethyl acetate, butyl acetate.