Competition watchdog demands Russian oil majors cut fuel prices

Russia’s Federal Antimonopoly Service (FAS) has ordered major Russian oil companies to bring wholesale fuel prices down in line with market prices and warned that it may launch new investigations into price fixing, the competition watchdog said on Thursday.

“FAS considers it necessary that the oil companies should cut wholesale prices for oil products in sync with the market environment. If companies fail to cut prices, FAS may initiate new antimonopoly proceedings,” the service said in a statement. 

The watchdog has written to Russia’s largest independent crude producer LUKoil, Gazprom Neft, the oil arm of state-controlled energy giant Gazprom, state-run Rosneft,  Russian-British joint venture TNK-BP, Surgutneftegas, Tatneft, Alliance Oil and Bashneft, the service said.

In the past, the watchdog has fined Rosneft, LUKoil, Gazprom Neft and TNK-BP a total of 26 billion rubles for inflating fuel costs.

Retail fuel prices have risen sharply in several regions of Russia recently, and shortages have occurred in some regions. The oil companies blame the government for capping retail fuel prices in an attempt to head off discontent before the elections later this year.

Russian oil firms prefer to sell fuel abroad, where prices are higher.

The government has accused the oil majors of collusion over prices and abusing their dominant retail position in regional markets at home.

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