Lukoil Delays Refinery Maintenance, Drops Wholesale Gasoline Prices Amid FAS Pressure

Strategic Insights -

Russia's leading oil company, Lukoil, has postponed scheduled refinery maintenance from September to November to prevent a fuel shortage, while lowering its refinery-gate prices by 400-500 rubles a tonne. This move comes amidst intense scrutiny from the Federal Antimonopoly Service (FAS), which has been investigating oil companies for alleged anti-competitive practices. Lukoil has also denied growth in retail prices, stating that the current retail markup is 3,500-4,000 rubles a tonne.

Key Takeaways:

  • Lukoil has delayed scheduled refinery maintenance from September to November to prevent a fuel shortage in Russia.
  • The company has lowered its refinery-gate prices by 400-500 rubles a tonne, citing the need to prevent fuel price growth.
  • Lukoil is cooperating closely with the FAS regarding fuel prices, but has expressed reservations about the proposed pricing formula, which would link fuel prices to export prices.
  • The FAS has written to six oil companies, including Lukoil, Rosneft, Gazprom Neft, TNK-BP, Surgutneftegas, Alliance Oil Company, and Tatneft, asking them to clarify why wholesale prices on oil products remained unchanged in August-September 2009.
  • This is the third series of cases against oil companies suspected of breaching anti-monopoly law on oil product sales.
  • In 2009, the FAS fined Gazprom Neft, TNK-BP, Rosneft, and Lukoil a total of 6-7.5 billion rubles for allegedly abusing their positions in the fuel market.
  • The FAS has also fined TNK-BP and Gazprom Neft 4.197 billion rubles and 4.675 billion rubles, respectively, for breaching anti-monopoly legislation on wholesale fuel markets in the first half of 2009.

Statistics:

  • 400-500 rubles: reduction in refinery-gate prices by Lukoil
  • 3,500-4,000 rubles: current retail markup per tonne
  • 6-7.5 billion rubles: combined fines imposed on Gazprom Neft, TNK-BP, Rosneft, and Lukoil in 2009
  • 4.197 billion rubles: fine imposed on TNK-BP for breaching anti-monopoly legislation in the first half of 2009
  • 4.675 billion rubles: fine imposed on Gazprom Neft for breaching anti-monopoly legislation in the first half of 2009
  • 1 billion-1.5 billion rubles: fines imposed on Lukoil and Rosneft in 2009

Sources:

  • Interfax, "Lukoil delays refinery maintenance, drops wholesale gasoline prices" (October 7)
  • Interfax, "FAS fines TNK-BP, Gazprom Neft 4.197 billion and 4.675 billion rubles, respectively" (no date)
  • Interfax, "FAS fines Gazprom Neft, TNK-BP, Rosneft, Lukoil a total of 6-7.5 billion rubles" (no date)
  • FAS letter to oil companies, October 2 (no date)