Russia To Buy Oil on Burse

Russian state agencies are to buy 1 million metric tons of oil at exchanges in 2007 after oil products start being traded in April, under a governmental draft on oil products trading. Meanwhile, the Federal Tariff Service is going to take into account oil quotations in calculating state-regulated tariffs, Kommersant daily reported.

Oil products and crude oil are to start being traded on petroleum exchanges in Russia in April, according to a draft regulation by the Russian Economic Development and Trade Ministry which will come in force by early February.

The draft contains a plan for all state agencies and enterprises to gradually start buying oil products on burses. The Economic Development Ministry is to pick market floors before April to carry out purchases. State purchasers are going to be divided in two categories. The first category is for companies with more than 50 percent state ownership. These companies are going to take part in trading before April 1. The second category is for state bodies which spend budget funds to buy oil products. They are expected to enter trading before July 1. In mid-2007, at least 15 percent of oil products and crude oil supplies must come from purchases at petroleum exchanges.

12 million metric tons of oil products is bought in Russia annually for state needs. Over 1 million tons of oil may be sold at exchanges this year. Regional authorities will be encouraged to go and buy at exchange as the federal tariff watchdog starts calculating administered prices on the basis of oil exchange quotations.