Registration of over-the-counter transactions for petroleum products started without applications

During the first ten days of voluntary registration of over-the-counter transactions for the supply of petroleum products in volumes of more than one ton, market participants did not submit a single application. Kommersant reports this with reference to data from the Federal Antimonopoly Service (FAS) of Russia.

The requirement will become mandatory from March 1, 2027, but for now the system operates in a narrow format. Only fuel producers who sold more than 100 thousand tons over the past year must report for transactions of 60 tons or more when selling for export. Also, agreements on the supply of more than 25 tons of straight-run gasoline on the domestic market are subject to registration.

The conditions are enshrined in government decree No. 1111 of August 29, and the experiment started on September 1. According to the FAS, the registration system will allow for better tracking of supply chains and more transparent pricing.

However, an industry source believes that this is an attempt to demonstrate the regulator’s activity in a situation where it is not possible to solve the main problem, that is, to saturate the domestic market with gasoline due to insufficient production at oil refineries.

There are also concerns that the system will create significant transaction costs for traders. Another interlocutor of the publication recalled that the share of the largest trader does not exceed five percent of the exchange or one percent of the entire Russian oil products market. Thus, registration will not affect deliveries in any way.

Open Oil Market CEO Sergei Tereshkin agrees that the registration of over-the-counter transactions alone is unlikely to put pressure on prices. Data collection may increase the administrative burden, but will not become a lever for reducing fuel costs.

NEFT Research Managing Partner Sergei Frolov added that additional market control will allow the FAS to identify possible discrimination against its independent participants, although at the same time it will also create barriers for small traders.