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. Last Updated: 07/27/2016

Watchdog, Oil Firms Reach Deal

The Federal Anti-Monopoly Service reached an agreement with the four-biggest Russian oil firms on determining oil prices, hopefully ensuring that there is no repeat of a protracted spat between the two sides that has run on since 2008.

The service reached the agreement with the heads of Rosneft, LUKoil, TNK-BP and Gazprom Neft, Anatoly Golomolzin, deputy head of the service, told Prime-Tass on Wednesday.

According to the agreement, the oil firms will determine domestic oil prices by taking the price on international markets and subtracting customs tariffs and delivery costs, Golomolzin said.

In addition, prices must change on the domestic market at the same rate that they change on the international market, he added.

The agreement calls for the creation of a working group with representatives from each of the four firms in addition to other market participants. The commission’s first meeting will be Nov. 30.

The anti-monopoly service opened cases against the oil majors in 2008 and found them in violation of the law on competition. The service accused the oil firms of colluding to set artificially high prices on gasoline and other refined products and levied modest fines against them.

The service opened another set of cases against the majors this year, upping the ante by significantly increasing the fines. It fined Gazprom Neft 4.7 billion rubles ($163 million), TNK-BP 4.2 billion rubles, Rosneft 5.3 billion rubles and LUKoil 6.5 billion rubles.