OREANDA-NEWS. December 01, 2014. The Council of the Heads of the Governments of the Commonwealth of Independent States (CHG CIS) met in Ashkhabad, Turkmenistan. Deputy Head of the Federal Antimonopoly Service (FAS Russia), Anatoly Golomolzin took part in the meeting and made a presentation “On the State of Competition and Pricing on the Markets of Oil and Oil Products”.

He pointed out that “traditionally, the Headquarters on Antimonopoly Investigations at the Interstate Council on Antimonopoly Policy (ICAP) solves the problems on the most important CIS markets (air transportation, roaming) and actively suggest the avenues for solving them to be considered by CHG CIS. The issue of oil products is one of the most pressing at the moment. It concerns both large and small countries, importing and exporting countries. At the same time, the markets of oil products are not only national but also global”.

The market of oil products required changing the format of interaction between the antimonopoly bodies. Upon an initiative of FAS Russia and Austria’s Federal Competition Authority, in 2011 an International Working Group was formed (IWG), comprising representatives of 20 countries. Along with the CIS states, representatives of Austria, Germany, Portugal, the US and others took part in the sessions.

Under the frame of joint efforts, IWG participants exchange opinions on a regular basis on the procedures of market analysis (typically oligopolies), practices of investigating cases on violating the antimonopoly law, and monitoring wholesale and retail prices. A common platform for exchanging non-confidential information on the issues was formed. Specialists of the antimonopoly bodies have an access to the platform, which increases the quality of work.

In 2013, OECD and UNCTAD highly praised the results of IWG efforts.

An IWG meeting in London focused on the problems of world prices on oil and oil products. The entire system of world pricing in exchange as well as off-exchange segments is built on price indices published by two agencies. They have a long track record, and have accumulated statistical data on price movements. Trading with physical oil products, derivatives, taxation systems, etc., are based on price quotations from these global information agencies. At the same time prices indices are formed in accord with the rules of private companies; the procedures of internal and external control, representativity of data samples on transactions, etc., are questionable.

Russian practice differs significantly to the better. Indices of exchange and off-exchange prices are formed and published in line with the antimonopoly law and the Law on organized trading. Global agencies use the procedures of sample “reporting” of transactions prices; Russia registers actual transactions exceeding in total 80 million tons, which is much more than the global agencies use.

Exchange trading with physical goods (oil products) is being actively developed. It should be specially emphasized that out of nearly 13 million tons of oil products sold through exchange in 2013, approximately 0.5 million tons come from Belarus refineries. Developing such kind of trading is being discussed with the antimonopoly bodies from other CIS countries; and there is a mutual understanding across the exchange community of the CIS states.

Market participants started concluding off-exchange export transactions with oil products for Rubles. Trading with diesel fuel for export at SPIMEX is under discussion. Preparatory measures are being undertaken to form Urals and ESPO oil blend quotations. Thus, transparent pricing is formed and continues developing in the CIS space.

The Report “On the State of Competition and Pricing on the Oil and Oil Products Markets” was highly appreciated at the Ashkhabad meeting. Participants supported a proposal of the Chairman of the Government of the Republic of Belarus, the Chairman of CHG CIS in Ashkhabad, Mr. Myasnikovich, to take into account the Report when determining the direction of CIS economic policy. The issue will be discussed on 12 December 2014 in Moscow by CIS Economic Council.