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. Last Updated: 07/27/2016

Oil Firm Penalty Plan Shelved

The Federal Anti-Monopoly Service said it had dropped plans to punish oil firms for rising gasoline prices after they agreed to cap them as the country enters a politically sensitive pre-election period.

The Deputy head of the Federal Anti-Monopoly Service, Anatoly Golomolzin, said a preliminary investigation into the gasoline market showed that the price growth has slowed in August after a spike in June and July.

"Wholesale prices were growing, but they stood either below or close to last year's maximum levels. They have decreased recently. So there is no reason for retail prices to grow either," Golomolzin said late Monday.

The cartel office began the investigation in July, demanding that oil companies justify a rise in wholesale gasoline prices, which could ultimately lead to a spike in prices at filling stations and cause public anger.

The investigation began after Prime Minister Mikhail Fradkov said high fuel prices were making it hard for the government to meet its 8 percent inflation target for 2007.

The issue of gasoline prices typically becomes increasingly politicized in Russia ahead of elections. Ordinary voters already often question why gasoline prices in Russia, the world's No. 2 oil exporter, are higher than in the United States, the world's largest crude importer.

Prices for the 92-octane gasoline across the country range between 16.40-20 rubles (64 to 78 cents) per liter.