7 Oct 2009 20:10

Lukoil delays refinery maintenance, drops wholesale gasoline prices

MOSCOW. Oct 7 (Interfax) - Lukoil has delayed scheduled refinery maintenance from September until November this year in order to prevent a fuel shortage in Russia, the company said in a press release.

Lukoil has also lowered its refinery-gate prices by 400-500 rubles a tonne. "The retail markup is 3,500-4,000 rubles a tonne at present and growth in retail prices is not envisaged," the company said.

Lukoil said it was cooperating closely with the Federal Antimonopoly Service (FAS) regarding fuel prices. But it said the pricing formula proposed by the FAS, that fuel prices in Russia should be based on export prices, would push most refineries into the red and reduce petroleum product output in Russia.

Lukoil said the statement was issued "in connection with numerous media enquiries regarding its response to a FAS letter of October 2."

The FAS on October 2 wrote to oil companies and asked them to submit their explanations by October 5 for why wholesale prices on oil products were left unchanged in August-September 2009 and to report on measures the companies have taken to bring prices to market levels.

The letter was sent Rosneft , Lukoil , Gazprom Neft , TNK-BP , Surgutneftegas , Alliance Oil Company and Tatneft .

This is the third series of cases against the oil companies suspected of breaching anti-monopoly law on oil product sale.

The FAS at the end of last year accused Gazprom Neft, TNK-BP, Rosneft and Lukoil of abusing their commanding positions in the fuel market and fined them between 1 billion and 1.5 billion rubles. The oil companies are still challenging the fines in courts.

The FAS in the summer of this year deemed that the same four oil companies had breached anti-monopoly legislation on the wholesale fuel market during the first half of 2009. It fined TNK-BP and Gazprom Neft 4.197 billion rubles and 4.675 billion rubles, respectively, and the companies intend to challenge these fines in court. The FAS has not yet decided how much to fine Lukoil and Rosneft.

A FAS representative told Interfax that the FAS would take Lukoil's actions into account, but that the issue of the fine for H1 2009 would have to be resolved in the context of the administrative case and an analysis of all aspects of the violation.

Asked whether Lukoil had lowered its gasoline prices as a result of consultations with the FAS and whether the other oil companies might follow its example, the FAS representative said: "We haven't been informed whether other market participants have taken similar measures."

He also said a FAS working group was dealing with questions related to working out common approaches to pricing on the fuel market.