Russian regulators looking into potential effect of oil companies purchasing fuel on exchange via third parties

MOSCOW. March 19 (Interfax) - The Energy Ministry and the Federal Anti-monopoly Service (FAS) are currently looking into the potential effect on wholesale prices of oil companies purchasing fuel on the exchange through third parties, Deputy Energy Minister and Director of the Department of Oil and Gas Anton Rubtsov told reporters.

"The Russian Fuel Union (RFU) has submitted this request to the government. [Deputy Prime Minister Alexander] Novak has given us this instruction, and we are working on it and analyzing the effect of these transactions. Indeed, there are purchases by vertically integrated oil companies to supply their networks of filling stations. This is done objectively to improve the efficiency of smooth logistics, meaning from a market perspective, this is a benefit. However, given the high demand in the exchange channel, according to the RFU, this has an additional effect on prices. We must assess the effect and consider possible tools that could optimize the matter together with the FAS and the exchange," Rubtsov said.

The RFU previously sent a letter to Novak, noting that oil companies' purchases of petroleum products on the St. Petersburg International Mercantile Exchange (SPIMEX) through third parties could distort exchange-trading prices during the high-demand season. The RFU believes that a special mechanism is required in order to identify and account for third-party purchases of exchange-traded petroleum products on behalf of oil companies in order to reduce the effect of these transactions on exchange price indicators.