OREANDA-NEWS. June 24, 2009. TNK-BP succeeded in cancellation of a fine of 1.1 billion rubles imposed on the company by the Federal Antimonopoly Service late last year due to monopolistic high prices of gasoline and kerosene. This is the first judgment of the court on the claims of oil companies against the fines of the Federal Antimonopoly Service amounting to a total of 5.35 billion rubles, reported the press-centre of TNK-BP.

The cases of Lukoil, Rosneft, and Gazprom Neft are still under consideration at the Arbitration Court of Moscow. However, the court decision in favor of TNK-BP did not change the position of the Federal Antimonopoly Service, which declared that it is initiating new cases against the oil companies related to high oil and gas prices early this year.

Yesterday, the Eighth Arbitration Court of Appeal in Omsk decided the case on the fine of 1.1 billion rubles in favor of TNK-BP. On October 10, 2008, the Federal Antimonopoly Service judged that the company broke the law “On Protection of Competition” by “establishing and maintaining monopolistic high prices for motor gasoline brands and jet fuel in the Russian Federation.” The Federal Antimonopoly Service required that TNK-BP should stop “abusing its dominating position” and on November 25, 2008 brought the company to administrative responsibility. TNK-BP appealed against all these decisions of the Federal Antimonopoly Service at the Arbitration Court of the Tyumen Region according to the rule that appeals against fines must be lodged on the territory of company location.

On April 6, 2009, the court declared all decisions of the Federal Antimonopoly Service invalid. Yesterday, the court of appeal dismissed the claims of the Federal Antimonopoly Service and the Public Prosecution. The press service of TNK-BP confirmed the information on this decision of the court of appeal but provided no comments.

The Federal Antimonopoly Service raised similar claims related to gasoline prices against three major oil companies – Rosneft (with a fine of 1.5 billion rubles), Gazprom Neft (with a fine of 1.35 billion rubles), and Lukoil (with a fine of 1.44 billion rubles). According to the Federal Antimonopoly Service, their overall share in 2007–2008 was 73.44% on the gasoline market and 79.26% on the jet fuel market. All these oil companies lodged their appeals against the decisions of the Federal Antimonopoly Service, but only TNK-BP received an official court judgment. The Arbitration Court of Saint Petersburg, where Gazprom Neft appealed against the fine, judged on January 29 that the fine was not legitimate only because the Federal Antimonopoly Service violated the procedure for bringing a company to responsibility.

Gazprom Neft filed an appeal, but the case is now suspended because the decision of the Federal Antimonopoly Service on imposition of fine is currently being considered at the Arbitration Court of Moscow. Rosneft and Lukoil are also in the process of litigation in Moscow. Proceedings for the Lukoil case, in which the other three oil companies take part as third parties, will be held today.

In the case of TNK-BP, the court decided that the Federal Antimonopoly Service made mistakes in determining the “product-related and geographic boundaries of commodity markets.” According to the court, different brands of motor gasoline cannot be considered a general commodity because not all gasoline brands are interchangeable. The court did not agree with the fact that the Federal Antimonopoly Service considered the entire territory of the Russian Federation as the geographic area of the wholesale market, because TNK-BP did not supply gasoline and kerosene in many regions of Russia. The Federal Antimonopoly Service, said the court decision, did not prove that the company artificially raised the cost of gasoline production, which is a sign of monopolistic high prices.

These conclusions of the court were received by Gazprom Neft with cautious optimism. The press service of Lukoil said to Kommersant: “In our dispute with the Federal Antimonopoly Service, we will use all legal methods for defending our position. We are viewing the decisions of regional courts in similar cases in favor of oil companies as an additional argument in finding a common position.” Rosneft shed only one phrase: “We will act within the limits of the law.”

Lawyers, however, note that the Arbitration Court of Moscow cannot rely on the court judgment in the case of TNK-BP. “Formally, this judgment will have no prejudicial effect,” explained Denis Uzoikin, lawyer and member of the Moscow Region Bar. Yesterday, Anatoly Golomolzin, Deputy Head of the Federal Antimonopoly Service, commented on the case of TNK-BP: “With all respect to the court judgment, but we will file a cassation appeal about it and will defend the legality and soundness of our position.”

According to Mr. Golomolzin, new cases are now initiated against the oil companies which will be considered in the nearest future. The claims of the Federal Antimonopoly Service are related to the fact that the oil companies did not lower the prices of oil products in late 2008 and early 2009 when the world oil prices were going down. “The attitude of the Federal Antimonopoly Service to the position of oil companies on the market did not change,” said Mr. Golomolzin. “We see that these companies have a market power which they exercise on the entire territory of the Russian Federation. Customers feel this power in the situation with prices.” On Monday, Igor Artemyev, Head of the Federal Antimonopoly Service, promised that “fines will be much higher than last time.”