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Today's paper. Last Updated: 05/30/2012

City Revokes Licenses of Gas 'Profiteers'

The Moscow government has revoked the licenses of 20 gasoline stations found to have been cashing in on the capital's gas shortage by boosting prices, city officials said Monday.


Alexei Rysetsky, deputy head of the city department that licenses gas stations, said some of the pumps charged more than double the rate they had agreed with the city, which limits their profit margin to just over 10 percent.


"There may be more licenses canceled," he said.


When gas supplies ran short and huge lines snaked through the city's streets last week, some private gas stations charged as much as 8,000 rubles ($2.50) per liter, catering to wealthy drivers who were willing to pay anything for shorter lines.


State prices ranged up to 500 rubles per liter, depending on the octane level, but when supplies fell low state pumps served only state clients such as buses and ambulances or shut down altogether.


Lines on Monday still stretched over 100 cars at even the most expensive pumps. But Alexander Korsak, deputy head of the transport department, insisted the shortage was over. "If there's a line, there is gas," he said. "All the pumps have petrol today."


None of the six companies that run the 20 stations affected by the crackdown could be reached for comment.


Mikhail Belyak, president of the Association of Independent Gas Stations, said "people on the market should be playing according to the rules," but added that "you can't say that every one of them is a crook."


Though some companies were overcharging, he said, others could only buy gas at high rates at refineries, sometimes hundreds of kilometers out of town, and spent large funds bringing it to Moscow.


Korsak said gas ran out because the main supplier, the Moscow Refinery, had an accident that cut output by a third, and because prices in the capital were much lower than in surrounding regions. The refinery resumed full production and prices were raised late last week.


Shortages were common in previous years but supply had been steady this year until the fall. In early October, gas stations ran empty only days before prices were hiked, fueling accusations that traders hid supplies until after the hike. Economists blame the Moscow government's continued use of price controls for the gasoline shortages.




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