OREANDA-NEWS. March 24, 2011. The Antimonopoly Committee of Ukraine fined three of Ukraine's major petroleum retailers for uncompetitive practices and colluding on price increases in December 2010 – January 2011, according to an official announcement on the committee's website this week. Fines amounting to 1% of 9M10 turnover were imposed on Galnaftogaz (UX: GLNG UK), Shell and Kontinent Trade (WOG), all fuel importers with no refining capacities in Ukraine. The companies claim the price hikes resulted from growing global oil prices and a 40% excise tax imposed as of January 2011. Galnaftogaz's fine amounted to UAH 32 mln.

Concorde Capital: the fine is significantly smaller than the penalty of 10% of turnover previously suggested by officials, but we estimate it to be ~10% of GLNG's 2010 net income. In light of the antimonopoly committee’s decision to fine only gas importers, we believe the likelihood the government pursues another preferential policy, import duties on gas, as more likely. Rumors of import tariffs have been around since fall and could be implemented as soon as global oil prices stabilize further, significantly eating into Galnaftogaz’ margins.