Price fixing in Russia to result in prison

The Russian State Duma passed a law today making price fixing and unfair competition punishable by imprisonment, Moskovsky Komsomolets newspaper reports. A maximum prison term of seven years can be imposed in cases where violence is used or threatened.

Offences of this nature were were earlier punished by fines alone.

Fines amounting to billions of rubles have been imposed by the Russian Federal Antimonopoly Service on Russian oil companies in the last year. Last summer, the FAS investigated the five largest oil companies – Gazprom Neft, TNK-BP, Rosneft, Surgutneftegaz and Lukoil - for malpractise in the petroleum, gasoline and aircraft fuel markets, among others. The agency fined the companies, with the exception of Surgutneftegaz, between 1.11 billion and 1.51 billion rubles ($34.9-47.5 million) each. Surgutneftegaz was not fined. Those fines are now being appealed in court. Gazprom Neft’s appeal will be heard in a Moscow arbitration court on August 14, the RBC new agency reported today.

After prices for petroleum products did not drop in the last quarter of 2008, and even rose 30-60% in the first two months of this year, the FAS filed new charges against Gazprom Neft, TNK-BP, Rosneft and Lukoil. Those charges are still pending.