OREANDA-NEWS. May 16, 2013. The Federal Antimonopoly Service (FAS Russia) and the Ministry of Energy of the Russian Federation issued a joint No. 313/13/225 order to approve the minimum value of the oil products sold through exchange and the requirements to exchange trading, in the course of which an economic entity, which has the dominant position on the relevant markets, concludes transactions with oil products.

These requirements were earlier approved by a joint Order of FAS Russia and the Ministry of Energy of 31st January 2013. At the same time, FAS received a letter from the Federal Financial Market Service which stated that restricting transactions on the basis of offsetting orders, made by one of the participants of exchange trading, affects liquidity of the exchange market and prevents development of commodity exchange trading.

The antimonopoly body also received petitions from several vertically-integrated oil companies and “Commodity Market Council” Non-Commercial Partnership with proposals to reconsider the provisions establishing requirements for the minimum liquidity of exchange trading with oil products.

For instance, the requirements formalised that sales of oil products through exchange by dominant economic entities and the persons included in the same group of persons, and (or) participants of exchange trading operating in the interests and at the expense of these persons, should exceed 8% of the overall production of gasoline, 4% of the overall production of diesel fuel, 8% of the overall production of fuel for jet engines, and– 1.6% of the overall production of residual fuel oil.

An inter-branch meeting on developing trading with hydrocarbons, chaired by the Minister of Energy of the Russian Federation, Alexander Novak, with participation of Deputy Head of FAS Anatoly Golomolzin, Deputy Head of FAS Andrey Kashevarov, and Deputy Head of the Federal Financial Market Service, Sergey Kharlamov, as well as the president of “St Petersburg International Mercantile Exchange” CJSC, Alexei Rybnikov, made a decision to review the wording of the joint Order of FAS Russia and the Ministry of Energy of 31st January 2013 in view of the positions of the Federal Financial Market Service and market participants.

The requirements to exchange trading, approved by the joint order of FAS Russia and the Ministry of Energy of 30 April 2013, in the course of which transactions with oil products are concluded by an economic entities that has a dominant position on the relevant markets, do not prohibit transactions on the basis of offsetting orders filed by one of the participants of exchange trading. At the same time, such transactions shall be excluded from calculating the minimum volume of exchange products to be sold through exchange trading, fixed for each economic entity that has dominant position, and calculating the reserved price.

The requirements for the minimum liquidity of exchange trading are preserved since they are set at a lower level with regard to the values specified for each economic entity with dominant position (8% and 10% of domestic consumption of oil products accordingly). The minimum liquidity of exchange trading also includes oil products that are sold through exchange trading and form state material reserves and (or) reserves formed by vertically-integrated oil companies.

The joint Order of FAS Russia and the Ministry of Energy of 30th April 2013 has been forwarded to the Ministry of Justice for the state registration.