OREANDA-NEWS. March 13, 2013. At a session of the Competition Committee of the Organization for Economic Cooperation and Development (OECD), the General Director of the Austria’s Federal Competition Authority, Mr. Theodor Thanner reported the results of activities and initiatives of the International Working Group on pricing on the markets of oil and oil products, formed upon an initiative of the Federal Antimonopoly Service (FAS Russia) and the Austria’s Federal Competition Authority in 2011.

Mr. Thanner discussed the main objectives and tasks of the Working Group. The objectives of the Working Group are:

- Facilitating development of price indicators that reflect fair prices for oil and oil products formed under market conditions;

- Ensuring competitive pricing, in particular, under organized forms of trading with oil and oil products.

The tasks of the Working Group are:

- Discussing the existing approaches to monitoring and analysis of wholesale and retail markets of oil and oil products;

- Developing the methodology for defining product and geographical boundaries of wholesale and retail markets of oil and oil products;

- Studying oil and oil products pricing on the national markets, in particular, impact of global prices upon pricing on the national markets;

- Exchanging experience and approaches to antimonopoly enforcement on the market of oil and oil products; discussing the procedures for exchanging non-confidential information between the members of the Working Group.

Mr. Thanner also talked about the general database developed by the Austria’s Federal Competition Authority, comprising data obtained by monitoring and statistical observations, summarizing the main achievements in methodologies and practices of antimonopoly enforcement, etc. The Platform will be a general instrument enabling competition authorities to exchange the main information about the national oil and oil products markets. He also demonstrated a screen-shot of the Platform.

Deputy Head of FAS Anatoly Golomolzin, along with experience of Russia and Austria, emphasized experience of the countries used to prepare the report. In particular, experience of the USA to monitor retail prices for oil products in 360 towns in the USA and wholesale prices across the 20 largest industrial-residential agglomerations in the USA as well as economic-statistical analysis of such information.

Anatoly Golomolzin also emphasized Portugal’s experience on comparative analysis of the countries of the European Union. This research showed that there is asymmetry between domestic and international prices in most countries – members of the EU. The upward trend in global prices is translated to the national markets without significant delays and with a considerable degree of correlation. The downward trends – have considerable delays and a lesser correlation. It may be caused by the conditions for competition on the national markets.

The Working Group paid special attention to the global price agencies. The results of their activities affect both the physical markets of oil and oil products as well as the markets of derivatives. These issues are also in the focus of attention of the “Big 20”.

Representatives of the USA, Portugal, Ukraine and Germany also emphasized importance of the efforts of the Working Group and expressed their readiness to continue participating in it. Summing up the discussion, the Chairman of the OECD Competition Committee, Mr. Jenny, pointed out the need to continue this work. He also marked that the importance of the activities of the Working Group is driven by the agenda of OECD sessions in June 2013, which includes prices for oil products.

The next session of the Working Group will be in Kiev (Ukraine) on 28th March 2013. The session will be organized by one of the members of the Working Group – Ukraine’s Antimonopoly Committee. Participants will discuss the procedures for exchanging non-confidential information, and sum up the results of activities of the Working Group and prepare proposals for the national governments for developing competition on the markets of oil and oil products.

The International Working Group on pricing on the markets of oil and oil products and methods of its functioning was formed upon an initiative of the Federal Antimonopoly Service and the Austria’s Federal Competition Authority at its first session in Moscow (Russia) in October 2011 following a discussion at a representative international conference.

Representatives of around 20 countries from three continents took part in the sessions of the Working Group – Russia, Austria, Portugal, Germany, Kazakhstan, Ukraine, the USA, the UK and others.

At the first session in Moscow (Russia), a decision was made to form the Working Group upon discussing the existing problems, consequences in the social-and-economic sphere, importance of these markets for the economy of different states, both exporters and importers of oil and oil products.

The second session (Vienna, Austria, 29th June 2012) focused on the methodology of analysis of oil and oil products markets, accounting for the specifics of wholesale and retail sales caused by oligopolistic market structure and vertically-integrated chains of relations between its participants.

The subject of discussions at the third conference (Kazan, Russia, 11th September 2012) were monitoring of oil and oil products markets, which the parties monitor continuously, taking into account social and economic importance of these markets, by workforce and means of the antimonopoly bodies directly as well as under the framework of the system of state and industry departmental statistics.

At the fourth session the Working Group also studies pricing on the global markets and the impact of global prices upon wholesale prices on the national markets of oil and oil products. To this purpose, participants of the Working Group visited the Headquarters of Argus and Platts - the largest world informational-and-analytical agencies as well as ICE exchange in London, where they had detailed discussions of the main issues of oil and oil products pricing on the global markets, mutual impact of physical markets of oil and oil products and the markets of derivatives, independence of the institutes of pricing, transparency and reasonableness of assessment methodology and procedures, etc.