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. Last Updated: 07/27/2016

Anti-Monopoly Service Targets Fuel Price Rises

VedomostiIgor Artemyev
The Federal Anti-Monopoly Service plans to reduce the dominance of groups of companies in the country's oil and gas industries to less than 70 percent of the market to fight corruption and rising fuel prices and boost competition, the head of the regulatory agency said.

The agency is changing anti-monopoly law so that each company in a group would be considered "dominating," if the group's total share comes to 70 percent of the market, Igor Artemyev, the head of the anti-monopoly service, said at a briefing Tuesday. The law may impose fines for setting "monopoly fuel prices" by "dominating companies," he said.

"The situation in natural resources is not favorable," Artemyev said. "The level of concentration is really high, and certain groups of individuals control more than 50 percent of resources. We don't have to wonder why there is a price increase in the sector."

The regulators and the Natural Resources Ministry have set up a working group to prepare the amendments to the subsoil law and possibly to laws on forestry and water resources to increase control over concentrations in the natural resources industry, Artemyev said.

The service also plans to propose setting up trading of oil and natural gas over exchanges to fight rising domestic fuel prices and boost competition. The regulators may also propose trading grain over an exchange, Artemyev said.

"We can't agree with the monopoly position of Gazprom," Artemyev said. "We have sent a letter to Gazprom with proposals to discuss what could be done, but we keep the right to act in the frame of law."

Gazprom, the world's largest natural gas producer, is the country's dominant gas supplier and its gas pipeline monopoly.

Artemyev said that the anti-monopoly service may decide in April whether to approve Total SA's plan to buy a 25 percent stake in Novatek, Russia's No. 2 gas producer.

The service has been delaying approval of the purchase, citing changes Novatek has made in its structure.

Regulators also have yet to rule on Siemens' takeover of Siloviye Mashiny, the country's biggest producer of turbines for power plants, Artemyev said.