NPP collusion and government inaction

2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55

I constantly listen on the radio and read all kinds of "analytics" about a series of scandals and conflicts in connection with the rise in gas prices - and am amazed at the terrible confusion in terminology. The feeling that it is being brought in on purpose - so that ordinary people cannot understand a simple and transparent, like a teardrop, situation.

So, three parties are known to be involved in the battle over gasoline prices. First, the so-called "vertically integrated oil companies" (VINKs) are monsters that do everything from mining and oil refining to retailing gasoline. Then the government - which, as it were, makes sure that there is no rise in prices to Ukrainian 75 rubles per liter. And the third party is "independent filling stations".

On the radio, it sounds all the time that oil companies torture independent traders, because at oil refineries (and there are no independent oil refineries in Russia, all are part of VINKi) "wholesale prices are higher than retail prices." And this, of course, is a dead end for independent gas stations.

But what is this strange wording: "wholesale prices are higher than retail"? After all, retail prices are set, in theory, by the refuellers themselves. What does an independent petrol operator mean when he complains?

Obviously, he is complaining about someone else who also sets retail prices. Who is this villain? Without a doubt, these are gas stations owned by large oil companies (for example, Rosneft or Lukoil). Here they are, it turns out, and keep retail prices "below wholesale".

But why can gas stations owned by VINKs afford this absurdity - without complaining about anything, selling gasoline at prices lower than those at which they bought it, that is, to work “as planned at a loss”? Because for Lukoil and Rosneft gas stations, this is a purely accounting focus. In fact, there is no loss if one link of the common chain works for plus, and the other for minus - the main thing is that the common plus overlaps individual minuses.

But why do VINKs need this stupid game from the outside - to put a loss in one of their links in order to cover it at the expense of another link? Everything is very simple: in order to launch gas stations around the world that are not part of those cartels and are forced to take gasoline at the general wholesale price - but are not able to sell it at a lower retail price. For them, such a “negative trade” is unthinkable, because there is no one to return the loss to them.

For the time being, these independent gas stations are getting out of their last strength - either trading in “left-handed” fuel, then introducing some kind of “anti-bonus” cards for transport companies interested in them … But it is clear that one cannot live that long - and very soon these independent gas stations operating today the main force against the increase in wholesale prices for gasoline will not become. Well, and our state has already learned to spit in every possible way for citizens who do not like this rise in prices either.

In other words, now on the fuel market we have a classic cartel conspiracy that has been described many times (read even "Dunno on the Moon"). Large corporations, by agreement, drive out small traders from the market, simply ruining them - through the organization of broad sales at prices below cost.

The government either cannot, or does not want to oppose this - although independent gas stations still account for up to 50% of the gasoline retail market in our country.

And if everything in this market continues to go according to the current plan, we, I repeat, will not have these independent filling stations very soon. They will or will be completely wiped off the face of the earth - like the capital's butchers' shops, which once gave freedom to farmers near Moscow, as opposed to the network giants. Or they will be included in vertically integrated oil companies, in the same “Rosneft”.

And then the increase in gasoline prices to European ones, which our gasoline kings only dream of, will become an already decided matter.