OREANDA-NEWS. August 30, 2011. Upon the outcome of a meeting with representatives of independent refuelling stations, the Federal Antimonopoly Service (FAS Russia) drafted an Action Plan to protect the rights of small wholesalers and retailers of oil products from unlawful actions of vertically-integrated oil companies, reported the press-centre of FAS Russia.

According to FAS Russia, regional suppliers that are part of vertically-integrated oil companies tend to fix higher wholesale prices for oil products for independent refuelling stations, particularly referring to the prices of non-competitive exchange trading. At the same time, fuel for “insider” sales companies is supplied at considerably lower prices than to independent companies. Such group conduct pattern of petrochemicals producers, which enables gaining non-competitive advantages, harms independent market participants and restricts competition. These actions are not caused by any external factors and are deliberately undertaken by the largest oil companies.

Other market participants are unable to buy products at the prices, at which vertically-integrated oil companies sell petrochemicals to their sales companies. Vertically-integrated oil companies use several sales schemes: sales through a chain of resellers that are not involved in economic activities; supplies to domestic market only through their subsidiaries, which, in their turn, fix and maintain prices at monopolistically high level. Alleging that some vertically-integrated oil companies are not ready to meet technical regulations, producers of petrochemicals sell oil products only to these companies and refuse to deal with independent economic entities.

Hence, FAS has decided to:

1. Send warning letters to all oil companies regarding the current situation on the oil products market, emphasising that violating the antimonopoly law is unacceptable, particularly by creating discriminatory conditions for the owners of independent refuelling stations.

2. Send letters to the Plenipotentiary Envoys of the President of the Russian Federation in the Federal Districts regarding the current situation on domestic market of oil products; actions of oil companies towards pushing independent market participants out of the market; and measures being undertaken by FAS Russia. FAS will also request to hold meetings with oil companies and regional / local authorities to stabilize the situation on the market of oil products.

3. Carry out unscheduled inspections of oil companies and commodity exchanges to verify that oil companies comply with the requirement to sell certain volumes of each type of oil products through exchange, and check the prices established through exchange trading.

4. As part of the “third antimonopoly package”, prepare amendments to the Code on Administrative Violations to formalize penalties for not registering off-exchange contracts - 1 million Rubles per contract.

5. Enquire to the Ministry of Energy and oil companies to submit plans / time schedules for refinery repair works.

6. Control volumes of oil products supplied by oil companies to domestic and external markets as well as control the system of oil products reserves, etc.

All regional offices of FAS Russia are instructed to carefully monitor the situation on the markets and if necessary initiate the antimonopoly proceedings. The Central FAS Office will also exercise special control over 74 cases already opened by regional FAS offices against oil companies in Russian provinces since the beginning of 2011.

FAS also intends to send a letter to the Government of the Russian Federation about importance of developing new reserving capacities (the schemes of capacity locations, the stage of construction, sources of financing, with whom to be located).

“Actions of the largest oil companies can be considered as a declaration of concerted “boycott” of other market participants. Among other circumstances, concerted actions can be corroborated by the fact that they are exercised by different market participants simultaneously in a relatively unified manner in the absence of any objective reasons for such conduct. I would like to emphasize that “boycott” is a form of cartels prohibited by Article 11 of the Federal Law “On Protection of Competition” and Article 178 of the Criminal Code of the Russian Federation”, said the Head of FAS Igor Artemyev.