FAS Closes Gasoline and Diesel Cases Against Lukoil, Kerosene Investigation Continues

Strategic Insights -

Russian oil giant Lukoil has escaped penalties in a case brought by the Federal Antimonopoly Service (FAS) involving breach of antimonopoly legislation in the gasoline and diesel fuel markets, according to a source familiar with the regulator's decision. The FAS decided to close the case due to a lack of evidence of violation of anti-monopoly law, and instead, will proceed with investigating a separate case involving aviation kerosene.

A decision in the kerosene case is expected within a month, after which the FAS will hear the case. Lukoil had previously lowered factory-gate prices for diesel fuel in the first half of the year, but maintained prices for gasoline, which had remained unchanged since the beginning of the year. The company also reported an increase in diesel fuel and kerosene supplies to the domestic market in the first five months of 2011.

Key Takeaways:

  • The FAS has closed a case against Lukoil for breach of antimonopoly legislation in the gasoline and diesel fuel markets due to lack of evidence.
  • The FAS has decided to proceed with investigating a separate case involving aviation kerosene.
  • Lukoil had lowered factory-gate prices for diesel fuel in the first half of the year, but maintained prices for gasoline.
  • The company reported an increase in diesel fuel and kerosene supplies to the domestic market in the first five months of 2011.
  • Lukoil had also pointed out that timely overhauls at company oil refineries had made it possible to avoid more serious consequences during the spring 2011 fuel shortage.
  • The company informed the FAS that oil-product shipment volume from refineries in the fourth quarter of last year had increased almost 40% year-on-year.

Statistics:

  • Lukoil reported a 7% increase in May gasoline deliveries compared to 2010.
  • The company increased diesel fuel supplies by over 7% year-on-year in the first five months of 2011.
  • Oil-product shipment volume from refineries in the fourth quarter of last year increased almost 40% year-on-year.

Sources:

  • Interfax, MOSCOW. Aug 9
  • Interfax, MOSCOW. Aug 9 (FAS and Lukoil press services are not commenting on this report)