Import substitution and pricing policy. FBK Partner at Transneft’s Expert Board meeting

Alexander Ermolenko, a FBK Legal Partner, took part at the meeting of the Expert Board of Transneft on the upcoming launch of trading of the Russian export Urals crude oil at the St Petersburg International Mercantile Exchange.

Currently, quotations for Russian crude oil and MIT rates rely on the data of the price agencies Platts and Argus. Futures on Urals are expected to serve as an independent tool for pricing the major national crude oil. In 4Q 2017, Federal Antimonopoly Service, Ministry of Finance, Ministry of Economic Development and Ministry of Energy are expected to submit a progress report giving their opinion whether the trading results could be used as benchmarks.

As explained by Аlexander Ermolenko, newly launched futures trading activities in Russia are very well integrated into the current import substitution trend, but to achieve the desired result, trading activities alone are not enough.

The Partner noted, “The meer fact that the trading has been launched does not speak for itself. For this tool to operate efficiently, an open oil market is needed. Otherwise, the exchange could not operate effectively, and its indices could not serve as benchmarks”

The meetings of the Expert Board of JSC Transneft have served as a public platform for discussion of topical issues of operation and regulation of the fuel and energy complex of Russia since December 2012. They regularly bring together experts from leading advisory firms, government authorities and energy companies leadership.

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