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. Last Updated: 07/27/2016

Fuel Sellers to Appeal $350,000 Fine

ST. PETERSBURG -- Fuel operators, fined 10 million rubles ($350,000) by the Antitrust Ministry for their alleged role in gasoline price fixing during last year's fuel crisis, will appeal the decision for a second time in arbitration court this week. The period of their appeal expires Sunday.

Instead of paying the fine, the companies had appealed the anti-monopoly charge in the St. Petersburg and Leningrad Oblast Arbitration Court, which ruled on Dec. 23, after several delays, that the charge was lawful. The law says the companies must pay or appeal the court decision within one month.

Last July, the local department of the Antitrust Ministry charged 11 fuel companies the total amount of profits it claims they made illegally during the crisis, which doubled and tripled gasoline prices around St. Petersburg.

The companies charged include Neste SPb, Shell AZS, LUKoil SPb, wholesale firm Petersburg Fuel Company, Petersburg Fuel Company Service, Transservice, Faeton, Kirishiavtoservice, Eco-Belm, Balt-Trade and Nevsky Fuel Company.

But operators contend that the court's decision was prejudiced and politically motivated by authorities who wanted to create a precedent for interfering in the running of private businesses. As an example of this ulterior motivation, the oil companies point to the curtailed court session, which lasted only 15 minutes and did not cover any of the financial data the companies provided, Yury Romanov, spokesman for LUKoil SPb, said. "Although the 50,000 rubles our company was charged is insignificant, the board of directors has serious intentions [to appeal]," he said in a phone interview this week. The company's appeal documents have already been prepared, he added.

Most of the other accused companies will also appeal the decision in court, Vladimir Zemlyanitsyn, a lawyer with Baltic Financial Industry Group, or BFPG, said. Eco-Belm and Balt-Trade, both accused of price fixing, are subsidiaries of BFPG.

"The participants have different positions, some have both retail and wholesale operations, while others are selling gasoline as middlemen and those differences will define their legal strategies," he said, adding that his company will appeal the decision.

"The Antitrust Ministry has more political goals than economic ones," said Andrei Grigorovsky, general director of Faeton company, which was charged 1.16 million rubles for its role in the alleged price fixing.

"Officials are not authorized to intrude into the price setting of a free market economy," he said. "Maybe those sums [the amounts the companies are fined] are already counted into the [city] budget," Grigorovsky said.

"The authorities are experimenting with the practice of intruding into private business and dictating their conditions," said Svetlana Snigir, general director of Kupol information service, which monitors fuel prices.

According to Snigir, the fuel market is extremely important to tax collection, because of the large turnover in the market.

The operators have said that the increase in domestic gasoline prices was due to soaring world prices causing Russian suppliers to export their products.

In 1999, retail prices of gasoline in St. Petersburg increased by 100 percent to 215 percent depending on the grade of gasoline, Kupol information service said.