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Head of FAS: Vertically Integrated Oil Companies Are to be Split into Retail, Wholesale and Production

The head of the Federal Antimonopoly Service (FAS) of the Russian Federation Igor Artemyev said on Wednesday that in order to improve the situation at the oil products market it is necessary to split vertically integrated oil companies (VIOC) into retail, wholesale and production ones.

“I am in favor of splitting VIOCs into retail, wholesale and production ones”, — the head of FAS says.

According to his words, “this would be an absolutely correct measure which ought to be well prepared, and of course not in the form of expropriation but as a business for sale at a good market price”. “This would have a serious effect”, — Artemyev noted.

Nevertheless he pointed out .that the government should be preparing such a reform thoroughly over a long period of time and while it has not happened the retail sector should be put some limitation upon.

“We believe that it is necessary to restrict a retail component to a 35% share in the market of each constituent territory of the Federation”, — the head of the regulatory body added.

In his opinion at present VIOCs are in fact destroying an independent retail trade in the regions, and such division could solve this problem.

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