Robert Gilyaziyev: ‘An anauthorised inncrease in price isn’t allowed at petrol stations in Tatarstan’
The head of the Fuel and Energy Resources Rational Use Agency about quality control and prices for fuel
During Realnoe Vremya’s online conference, head of the Fuel and Energy Resources Rational Use Agency in the Republic of Tatarstan Robert Gilyaziyev talked about tasks, key activities of the agency, control over retail motor fuel prices and explained how the quality of sold car fuel is examined, its key criteria and what measures are taken regarding those who failed the test.
Mr Gilyaziyev, unfortunately, few people know the key tasks and activities of the Fuel and Energy Resources Rational Use Agency. Could you talk about it?
To answer your question, we will have to remember history. Our agency was created in 2005. The Cabinet of Ministers of the Republic of Tatarstan is its founder. The years 2004-2005 were years of turbulent reorganisation of supervisory agencies in Russia, this is why some of them were closed. The Tatarstan oil inspection, gas inspection and an agency that took measures to save fuel and energy sources were among them. All these organisations subordinated the Ministry of Energy of the Russian Federation. The decision to close them was made at that moment.
At that time, nearly every region of the Russian Federation had an oil inspection because it controlled and provided quality of oil products, including motor fuels, from the stage of their production in oil refineries to transportation and wholesale and retail sale.
The gas inspection controlled the activity of gas enterprises, made sure gas was used rationally, controlled the activity of the reserve fuel facility and its timely preparation for the autumn-winter period. While the energy-saving subdivision examined the use of energy in enterprises, organisations and developed energy-saving programmes: this issue was topical because energy consumption per product made in Russia was 3,7 times higher than in Western Europe. And then Rustam Minnikhanov as prime minister of Tatarstan knew and understood this situation well and made a decision to found our agency. We were delegated a number of functions.
Special attention is paid to the reduction of costs of energy resources and improvement of their quality — their improvement will lower the price for all these goods and services
So products for more than 2,5tn rubles were made in Tatarstan in 2019. But over 18bn cubic metres of energy, gas a year had to be spent to manufacture such an amount of gross products. Our republic is third in natural gas consumption after Moscow and Moscow Oblast. We consumed more than 30bn kW/h of electrical energy, over 3m tonnes of motor fuels a year, over 50m Gcal of thermal energy, 250,000 tonnes of liquefied gas as motor fuel and more than 50m cubic metres of compressed natural gas.
Energy expenses account for a considerable and at times the biggest part of the value of a product made by industrial enterprises, shops, catering, housing and utilities, construction and even services of public agencies because public establishments also use motor fuel in their activity. This is why special attention is paid to the reduction of costs of energy resources and the improvement of their quality — their improvement will lower the price for all these goods and services.
This is why a public energy saving and energy efficiency programme was developed in our republic. Our establishment somehow participates in the implementation of this programme.
Motor fuel quality is a matter that concerns everybody, of course. How is the quality of petrol, diesel fuel and motor fuel in general is provided in Tatarstan?
Fuel quality will be a topical issue. Our oil department deals with this matter. If motor fuel’s quality isn’t proper, what can it lead to? A car’s engine will break down, fuel consumption will rise, the environmental situation will get worse when some indicators, for instance, the sulphur content is above state standards. So a lot of attention is paid to this issue in the republic. We have been monthly taking samples of motor fuels at petrol stations since 2005 — as many as 100 samples a month. Then the selected samples are analysed in a certified laboratory. After that, we send results of the tests to owners of petrol stations. If there are some deviations, all sensible owners start to look for reasons and take measures. But products with bad quality have sometimes been repeatedly found. In such a situation, we send materials to the republican Prosecutor’s Office or the Ministry of Environment and Natural Resources of the Republic of Tatarstan to take measures. Our agency doesn’t have such power, this is why all the information is sent to these agencies. This issue is also under constant control of the republic’s management.
If motor fuel’s quality isn’t proper, what can it lead to? A car’s engine will break down, fuel consumption will rise, the environmental situation will get worse
Besides, we take samples after consumers complain, public agencies appeal. Monthly quality inspections are held every year. In 2008-2009, we held two inspections during the year. There were big problems with the quality then.
Our agency examines if motor fuel quality requirements are met at petrol stations. There is a state standard that explains the rules of use of a petrol station — what measures the petrol station must take to provide quality of motor fuels it sells. This year, we have carried out 408 inspections to find out if they meet the requirements of regulations to provide quality of sold motor fuels. We have detected over 1,000 cases of non-compliance. All the cases have been found in small companies. They all have been given recommendations. To provide a rational use of motor fuels both at petrol stations and oil bases, we inspect, review breather valves, test the petrol station’s vapour recovery system.
Our republic has three large vertically integrated companies — TAIF-NK Petrol Station, Tatneft and LUKOIL. We don’t see they sell low-quality products. The same happens during monthly inspections. We have found non-compliance only among small companies and sole traders.
Are there those who don’t demonstrate discretion and keep violating the rules even though they are warned?
There have been such cases. Some companies think we don’t have the right for this. But our agency has always worked not as a controlling body but as a body providing prevention help to these organisations so that they will operate successfully.
For instance, large companies — TAIF-NK Petrol Station, Tatneft and LUKOIL — have their own special quality services. Whereas small companies don’t. Neither do they have specialists who would understand something here. Some of them have never held these rules in their hands. This is why, after receiving our recommendations, they start to get used to our actions years later and take measures. In 2019, we detected 10 organisations that had such deviations. This year, we have detected only one organisation that has had these violations since 2017. This means there is a benefit from our work. For this reason, I hope their number will be smaller or there will be none in the future.
If we have a look at the dynamics of detection of low-quality of motor fuels at petrol stations since 2005 in the Republic of Tatarstan, we can see that 22,7% of the products sold had a poor quality when our agency was founded. Then this number began to gradually go down. We have had positive dynamics on quality improvement in the last years. In 2019, the number was 2,8%, in 11 months in 2020, it has been 3%.
We should note that motor fuel is divided into grades. Nowadays the 5th-grade motor fuel must be manufactured and sold where the sulphur content shall not exceed 10 mg/kg. This influences both engine wear and the environment. Petrol with up to 1,000 mg/kg of sulphur was allowed to be made and sold before 2008. Then grades were adopted. This year we have seen that most petrol stations sell products with 10 mg/kg of sulphur. At the same time, at some petrol stations, the sulphur content is above the norm. The environment is the population’s health. This is why we would like our consumers to receive only quality motor fuel in the future.
As I have already said, we have received six complaints from consumers this year. During some years, we received up to a hundred complaints a year. We had 99 complaints in 2011. And most of them were confirmed by results of a test. This year, the results of the tests showed the contrary.
How important and complicated is it to keep a balance between interests of motor fuel manufacturers, chains that sell it and consumers?
The issue is indeed complicated. It is necessary to analyse and show why this happens. Did this happen in the past? The state itself fixed prices for commodities, including for motor fuel. And a manufacturer could sell a good only for a price that had been fixed. When we switched to the market economy, everything changed. Any producer has the right to fix its price to get the biggest profit. It is a natural condition of the market economy. And at the same time, it is necessary to strike a happy medium that would satisfy both manufacturers, those who sell fuel and consumers. Of course, any consumer will dislike a rise in price. Perhaps, this is correct. And here our main task that was set by the president not to allow an unfounded and sudden rise in price.
When we switched to the market economy, everything changed. Any producer has the right to fix its price to get the biggest profit. It is a natural condition of the market economy
The Fuel and Energy Resources Rational Use Agency was founded in 2005. What successes and in what areas have you managed to achieve in the last 15 years?
Everything we have done can’t be converted into rubles. But at the same time, we have managed to calculate the potential of detected energy saving. In the last 15 years, we have carried out energy inspections in 921 organisations and found potential for energy saving for 890,520,000 rubles. We have taken 39,467 samples of motor fuel, examined the state of 18,376 breather valves. As a result of the inspection, the potential for 118,304,000 rubles has been found. The total detected potential over these years has been 1,187,750 rubles.
I will stress once again that an unauthorised increase in price isn’t allowed at petrol stations in the republic. We didn’t allow it even in 2018. We regularly inform the Cabinet of Ministers and the republic’s president about the situation with motor fuel prices and its quality. Rustam Minnikhanov keeps both issues under serious control.