FAS Russia has initiated cases against oil companies

At the end of December 2010, following the findings of its preliminary market analysis FAS Russia sent letters to the oil companies requesting them to explain the reasons for growing prices and warning them to prevent unreasonable price increase. However, the growth of prices continued and from October 2010 to the end of January 2011 prices for winter diesel fuel increased 53%; within the same period prices for aviation kerosine increased by over 30%.
The Antimonopoly Service would like to state that there are objective reasons for the growth of prices for aviation kerosine and diesel fuel. However, the growth of prices on the external market and increase of excise duties can only partially explain the actions of the oil companies towards increasing the prices on the federal wholesale market at the end of 2010 and at the beginning of 2011.
The Antimonopoly Service identifies such signs of violations in the companies’ actions as fixing and maintaining monopolistically high prices and withdrawing goods from circulation, which have resulted in increasing prices and creating discriminatory conditions for fuel supplies by the companies – members of the group of persons of vertically-integrated oil companies in comparison with the companies that are not members of the same group of persons. FAS Russia is also unhappy about how these companies carry out exchange trading: insufficient quantity supplied, no anonymity of competitive bidding, irregular sales, large two-sided transactions that prevent obtaining market quotations for oil products.
The Antimonopoly Service also has questions to “TNK-BP” OJSC, “Surgutneftegaz” OJSC and “Bashneft” ANK” OJSC that according to the FAS Russia’s estimate achieved collective dominance on the market of oil products in 2010. FAS Russia is continuing a preliminary investigation of these companies.
FAS Russia has instructed its regional offices to take the necessary measures of antimonopoly control on the regional wholesale and retail markets.
In 2008-2009 FAS Russia considered “two waves” of cases against “Gazprom-Neft” OJSC, “Lukoil” OJSC, “Posneft” NK” OJSC and и “TNK-BP Holding” OJSC for violating the antimonopoly law on the federal market of oil products.
In 2010 the total fines transferred by the oil companies to the federal budget of the Russian Federation was around ten billion Rubles, and it is expected that in 2011 the sum will be even more in view of the court rulings on the cases of the “first and “second waves”.