OREANDA-NEWS. April 10, 2013. The 5th session of the Working Group on pricing on the markets of oil and oil products and methods of its functioning took place in Kiev.

The session was attended by representatives of competition authorities of Austria, Bulgaria, Kazakhstan, Russia, Romania, Ukraine, the Eurasian Economic Commission, the CIS Executive Commission, the Office of the President of Ukraine, the Supreme Rada of Ukraine, the Ukraine’s Ministry of Energy and Coal Industries, the Ukraine’s Ministry of Revenue and Duties, the Secretariat of the Cabinet of Ministers of Ukraine, as well as representatives of academic, expert and business communities of Ukraine.

The 5th session discussed the procedures for exchanging non-confidential information between members of the Working Group and summed up the results of the efforts of the Working Group and draft proposals for developing competition on the markets of oil and oil products on the basis of experience accumulated by the antimonopoly bodies.

Considerable attention was paid to devising and functioning of the Programme on “Information Exchange Platform”.

For instance, Deputy Head of the Federal Antimonopoly Service (FAS Russia) Anatoly Golomolzin stated that the Platform will enable competition authorities to exchange fundamental information about national markets of oil and oil products, which will enhance efficiency of cooperation between competition authorities, particular, in investigations of antimonopoly cases. To create the Platform, FAS is working closely with the colleagues from Austria’s Federal Competition Authority.

Anatoly Golomolzin also pointed out hat the Platform will have two symmetrical parts – in English (will be supported and filled in by experts of Austria’s Federal Competition Authority), and in Russian (which will be located at the official web-site of FAS Russia).The Platform will contain information on the results of activities of the Working Group, including monitoring and statistical data, the main achievement in methodology and enforcement of the antimonopoly law.

General Director of Austria’s Federal Competition Authority (AFCA), Theodor Tanner, described the technical characteristics of the Platform developed by AFCA for the purposes of exchanging information between competition authorities and outlined directions of its implementation and functioning.

Deputy Head of FAS Department for Control over Fuel-and-Energy Complex, Daria Savina, discussed performance of the Working Group in 2011-2013.

The authorized government official of Ukraine’s Antimonopoly Committee, Nikolai Barash, put forward the Committee’s proposals for building up the Platform in view of pricing specifics on national markets and the impact of indications of world prices for oil products upon them.

As a result of the 5th session, the parties signed the “Kiev declaration’, which contains the following conclusions and decisions:

The cross-border nature of many markets in question necessitates cooperation and exchanging information between national competition authorities.

Although relevant markets are regional / national, competition authorities of different countries face similar problems. Know-how and information on methodological, technical issues can be an advantage in resolving such problems.

Therefore, the Working Group decided that:

- Competition enforcement is a useful and powerful tool for resolving problems on the markets of oil products.

- An essential condition is adequate assignment of legal powers to competition authorities, securing qualified personnel and material researches.

- Analyzing the oil market and especially the market of oil products, it is necessary to pay special attention to comprehensive mutual interaction of regional, national and international factors, which determine competition conditions.

- Markets can frequently be characterized as purely oligopolistic, which makes combating cartels and exposing facts of abusing collective dominance especially important.

- Achieving transparency of oil products markets is the key problem.

- Both antimonopoly enforcement practice and the legislative framework aimed at developing exchange trading with physical oil and oil products and relevant derivatives, registration off-exchange, establishing exchange and off-exchange prices and indices of comparable foreign markets, are of importance.

The International Working Group on the pricing on the markets of oil and oil products and methods of its functioning was formed upon an initiative of the Federal Antimonopoly Service and the Austria’s Federal Competition Authority at its first session in Moscow (Russia) in October 2011 following a discussion at a representative international conference.

Representatives of around 20 countries from three continents took part in the sessions of the Working Group, in particular, Russia, Austria, Portugal, Germany, Kazakhstan, Ukraine, the USA, the UK and others.

At the first session in Moscow (Russia), a decision was made to form the Working Group upon discussing the existing problems, consequences in the social-and-economic sphere, importance of these markets for the economy of different states, both exporters and importers of oil and oil products.

The second session (Vienna, Austria, 29th June 2012) focused on the methodology of analysis of oil and oil products markets, accounting for the specifics of wholesale and retail sales caused by oligopolistic market structure and vertically-integrated chains of integrated relations between its participants.

The subject of discussions at the third conference (Kazan, Russia, 11th September 2012) was monitoring of oil and oil products markets, which the parties monitor continuously, taking into account social and economic importance of these markets, by the workforce and the means of the antimonopoly bodies directly as well as under the framework of the system of state and industry departmental statistics.

At the fourth session the Working Group also studied pricing on the global markets and the impact of global prices upon wholesale prices on the national markets of oil and oil products. To this purpose, participants of the Working Group visited the Headquarters of Argus and Platts - the largest world informational-and-analytical agencies as well as ICE exchange in London, where they had detailed discussions of the main issues of oil and oil products pricing on the global markets, mutual impact of physical markets of oil and oil products and the markets of derivatives, independence of the institutes of pricing, transparency and reasonableness of assessment methodology and procedures, etc.

In February 2013, General Director of Austria’s Federal Competition Authority Theodor Tanner and Deputy Head of the Federal Antimonopoly Service (FAS Russia) Anatoly Golomolzin presented a report on the results of the efforts of the Working Group, including development of the Platform, to OECD Competition Committee. The report contained preliminary conclusions made in the course of activities of the working group, and highly appreciated the contribution of competition authorities – members of the Working Group to various aspects of WG efforts. OECD Competition Committee supported the results of the efforts of the Working Group.