OREANDA-NEWS. November 17, 2010. According to the information disseminated by mass media, and monitoring carried out by the Federal Antimonopoly Service (FAS Russia), prices for motor fuel and aviation kerosene are increasing, reported the press-centre of FAS Russia.

To control the situation on the market of petrochemicals, FAS Russia has made enquiries to the following oil companies: “Lukoil” OJSC, “Gazprom Neft” OJSC, “TNK-BP Holding” OJSC, “Rosneft NK” OJSC, “Surgutneftegaz” OJSC, “Tatneft” OJSC, “Alliance NK” OJSC and “Bashneft ANK” OJCS about the reasons for the price growth and has instructed FAS Russia’s regional offices to check whether the growth of prices in retail and small wholesale are justified. Information must be presented by end of November –beginning of December.

Possible reasons for the price growth include rising global prices for petrochemicals, a seasonal change to production of winter diesel fuel, and introduction of excise duties in 2011.

FAS Russia would like to point out that because of the system of duties the growth of prices in domestic and external markets in the current month push up the duties, which then pushes up prices in domestic market in the subsequent month. Therefore, FAS Russia is of the opinion that it is essential to avoid the situation of 2008-2009, when the growth of prices in the external market was accompanied by growing domestic prices while when prices in external market were going down, there was no price reduction in the domestic market.

“Introduction of excise duties is going to take place within next several years. It should not affect the level of current prices. If prices change, it can only happen in the future and with some time lag. However, there should be no advance growth of prices”, said Deputy Head of FAS Russia, Mr. Anatoly Golomolzin.

Thus, FAS Russia believes that the situation on the fuel market should be stable and there will be no significant price increase for end-customers in the end of this year (at the same time some changes are possible due to market conditions). Accordingly, it is too early to talk about increasing airfares.

In 2008-2010 FAS Russia and its regional offices considered over 260 cases on antimonopoly violations on the markets of petrochemicals and were able to prove that:

In 2008, global oil prices were growing and the largest vertically-integrated oil companies in Russia fixed monopolistically high prices on wholesale markets; in the same period FAS Russia discovered numerous facts of fixing and maintaining monopolistically high prices and price collusions in retail markets.

In 2008 – beginning 2009 wholesale prices were dropping down but retail prices were lagging behind considerably, and the average retail margin jumped from 3.5 to 8 Rubles per liter. Regional offices of FAS Russia initiated multiple cases upon the facts of fixing monopolistically high retail prices in local markets.

In January - February and May - June 2009 the largest vertically-integrated oil companies were creating an artificial product deficit, which resulted in soaring wholesale prices in Russia: considerable volumes of petrol were exported despite lower profitability of exporting these products in comparison with selling in domestic markets.

In 2008 vertically-integrated oil companies exercised a discriminatory policy in wholesale sale of petrochemicals: their refineries were selling products to the “outsiders” at much higher prices, which restricted competition and was “forcing away” independent chains of service stations to the “grey” market of poor-quality fuel.