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. Last Updated: 07/27/2016

Competition Body Urges More Coordination Among Refiners

The Federal Anti-Monopoly Service wants oil firms to disclose and coordinate maintenance work at refineries to avoid a repetition of sharp gasoline and diesel price spikes, an agency official said.

Alexander Pirozhenko, head of the service's energy section, said the measure would be the first in a series of actions by his office to guarantee a competitive environment.

Gasoline prices are a politically sensitive issue, and oil firms have said they have informally agreed to cap price rises ahead of the March presidential election.

But a spike in inflation, which shot out of government control in the past months, will most likely prompt oil firms to drop the agreement earlier, analysts say.

"The competition on the market is at big risk. If we -- government and oil firms -- don't take large-scale action, the government could respond [to products price spikes] in such a way that no one would benefit," Pirozhenko said Thursday.

The government agency has large powers on paper, but their effectiveness on the oil market has yet to be tested.

The Russian refined products market is heavily monopolized, as big oil producers often control entire regions via large networks of gasoline stations that benefit by buying products from the same firm's refineries.

Moscow, St. Petersburg and regions in the Central Federal District maintain a more competitive environment due to the presence of several large players and smaller firms, which can survive competition due to high and volatile prices.

Market players say competition could suffer if independent refineries get acquired by vertically integrated majors, such as state-controlled Gazprom or Rosneft.

"It is a big challenge for us. In theory, we have two strategies -- respond by toughening direct state regulations or do it indirectly via state companies," Pirozhenko said.