OREANDA-NEWS. February 11, 2011. Transcript of the beginning of the meeting:
Vladimir Putin: Good afternoon.

As you know, yesterday we held a big conference on the performance of the fuel and energy sector in 2010. We discussed its problems and the goals for 2011. Overall, I'd like to repeat that this sector has registered very high growth rates and the quality has also changed. It is enough to mention how much was produced – 505 million tonnes last year – this makes Russia the world's leader in terms of production, and I'd like to emphasise that once again. We have agreed to keep production at this level, not even increase it but maintain this level because we must think about the influence of the scale of Russia's production on global prices, etc. We spoke about the contribution this sector should make to the modernisation of the Russian economy and innovation.

Indeed, fuel and energy companies (this applies to every division – hydrocarbons, oil, gas, coal, electric power engineering, nuclear power and alternative energy sources) have the resources for innovative development. By and large, we can say that the companies play a major role in driving this kind of innovative development, and we should encourage them to do so. Of course, we talked about pressing issues in the industry. One of them (and yesterday we confirmed this again) is the recent unjustified growth of prices on some types of petroleum products (petroleum and diesel fuel), from December to this January. During, or rather before the conference, some companies, such as LUKoil, Rosneft and Surgutneftegaz already brought down the selling prices of their oil refineries. Some of their colleagues announced their decision to lower prices during the meeting. I mean representatives of TNK-BP and Gazpromneft. I have a question in this context: how have our decisions at the conference impacted the market? Has something happened on the market or not? Have prices really dropped or not? Mr Sechin, what can you say on this matter?

Sergei Shmatko: After the companies made decisions at yesterday's meeting...

Vladimir Putin: Mr Shmatko, I was addressing Mr Sechin but if you've decided to take the floor, we'll be pleased to listen to the minister. Please, go ahead Mr Shmatko. We are listening.

Sergei Shmatko: Mr Putin, the companies have decided to reduce prices. According to their reports, their oil refineries have lowered prices by 1,000 roubles (Rosneft), 1,000 roubles (LUKoil), 1,500 roubles Gazpromneft), 1,500 roubles (TNK-BP) and 2,000 roubles (Surgutneftegaz).

In line with your instructions, we have nonetheless organised for the independent collection of information through the Russian Energy Agency, which has 70 affiliates around the country, and gathered information directly at petroleum stations. I must say that not all of the stations have reduced prices from the level of three days ago, but we registered a reduction from 50 kopecks to 1.2 rouble in about 30% of all regions. Maybe, this is partly because more than half of the retail petroleum products belong to independent stations and the procedure for lowering prices after their reduction by refineries will take some time. In our estimates, it will take about three days. Under the circumstances, we have agreed with the Federal Antimonopoly Service (FAS) to continuously monitor this situation. We have also instructed oil companies to work with their contractors, independent suppliers and sellers of oil products to make sure that the decisions adopted are reflected in retail prices. We will continue this work and report back to you.

Vladimir Putin: First, these big companies are usually the owners of large distribution networks. What is important for us? To have the consumer feel the change in his pocket. It should be clear at petroleum stations whether prices have gone down or not.

Second, if prices are reduced at the wholesale level, and this is felt at subsidiaries – petroleum filling stations, others will have to follow suit, whether they want to or not, or they will lose their clients. Mr Sechin, what do you think about this?

Igor Sechin: We have just checked in Moscow. Today, retail prices on winter diesel fuel have gone down by one rouble. This process will continue – we will monitor it.

I can add that the Achinsk refinery has reduced its prices by 1,550-1,555 roubles since January, the Angara refinery by 1,500 roubles, the Samara group of oil processing plants by 3,185, and the Komsomolsk...