Philipp Nikonov: "Oil companies benefit from the situation"

Philipp Nikonov, BOD Chairman of NefteTransServis CJSC and ex-Vice-President of Transnefteproduct OJSC, tells PortNews IAA about rail transportation of oil products and fuel logistics.

- Financial crisis resulted in increase of dollar rate in Russia which decreases competitiveness of maritime transportation of oil products as compared with that by railway, the tariffs for which are set in rubles and subject to regulation by the Federal Tariff Service. Do you agree with this thesis?

- When speaking about export, railway transportation as well as pipeline transportation is just a part of the way which crude and oil products pass before they reach an end user. So it is oil companies who benefit from this situation as they have considerable export shipment volumes. They draw income in dollars while their basic costs are in rubles.

- How has the price and rental of oil tank wagons changed during the first 5 crisis months? Have theratesof lease agreements changed?

- Tank wagon prices have decreased considerably to about USD 35000 as we used to forecast. Rent prices are falling as well though at slower rates. The rates of lease agreements have changed but they are difficult to discuss as there are no transactions at the market (or I just do not know about it).

-How large is the wagon component (the real one) in tariff? Does it allow adequate adjustment of prices according to market situation?

- Wagon component is sufficient for price adjustment the more so there is almost no RZD fleet left at the market of oil products transportation.

- Do you consider JSC Freight One (PGK or First Cargo Company) to be a rival? How strong is the influence of PGK on the tariffs of other private operators?

- Freight One  is a huge company operating a fleet the size of which is hardly achievable for any private company in the nearest future. We are not rivals in thisrespect. However I think PGK has already faced competition at the freight market in terms of both service quality and price.

- Does your company plan operating of your own fleet of locomotives? If you already do, is this practice economically reasonable?

- As of today, we do not have our own fleet of locomotives but we consider it as our upcoming trend.

- What are your plans as regards the structure and the scope of the rolling stock?

- It is difficult to put it in figures today. With the current credit rates and lease payments the purchase of rolling stock is not economically reasonable. The issue will be brightened later when we see the approach of the government to the support of carriers and transport engineering.

- Are there any plans on acquisition or construction of your own car-repair depot? If so, specify its geography and basic parameters?

- Having won in the contest of Russian Railways our company has acquired a car-repairing plant in Smara region (Smyshlyayevka). The plant is currently beingrefitted.

- Do you think Russian Railways is likely to economically facilitate export of oil products via Russian ports of the Baltic Sea?

- Export of crude and oil products via Russian ports of the Baltic Sea has considerably increased last years due to implementation of several large-scale projects like BPS, port Vysotsk, North project etc. I think that upon completion of Ust-Luga oil terminal heavy fuel oil being currently exported via Estonian and Latvian ports will go to Russian terminals. Last years saw pricing policy of Russian Railways focused on alignment of tariffs for cargo transportation towards Russian ports and border crossings. In view of the uncertainty of the situation with Russia’s joining WTO and the necessity to substitute falling transportation with the increase in different commodity groups, I think certain discounts are possible for rail carriers transporting oil products to the Baltic ports of the Russian Federation.