Gazprom Neft restructures its regional sales model

26 June 2013

Gazprom Neft is announcing a restructuring of its regional sales network, a move intended to separate the wholesale and retail side of the house at all levels. The main purpose of the project is to strengthen the sales and corporate governance, in particular, by simplifying and integrating the sales structure and separating the financial results of wholesale and retail businesses.

The separation of wholesale and retail shops also falls in line with the “JSC Gazprom Neft commercial practice rules relating to the sale of gasoline and diesel fuel in the Russian Federation,” signed by Gazprom Neft and Russia’s Antimonopoly Service  in February 2013. The document, produced by Gazprom Neft, defines the basic principles of wholesale petroleum product sales, including priority ranking of supplies to the domestic market and a unified price-setting procedure.

In order to better manage its wholesale business, Gazprom Neft has registered a company called LLC Gazpromneft Regional Sales in Saint Petersburg with four cluster branches: a central branch in Moscow, a Ural branch in Tyumen, a West Siberian branch in Omsk, and an East Siberian branch in Kemerovo. Gazpromneft Regional Sales sells petroleum products to small wholesalers and provides regional logistical services. The central wholesale cluster is a pilot, and began operating in April 2013. The cluster encompasses Moscow and Moscow Oblast, Saint Petersburg and Leningrad Oblast, and Ivanovo, Kaluga, Nizhny Novgorod, Novgorod, Pskov, Tver, and Yaroslavl Oblasts. The other branches began operating in June 2013.

The restructuring of retail sales began in June 2013 when petroleum product supply enterprises were combined into three clusters: a central cluster in Saint Petersburg, a Ural cluster in Yekaterinburg, and a Siberian cluster in Novosibirsk.

Gazprom Neft will continue to conduct exchange sales and volume sales, manage supplies, and control fuel quality.

“The company’s main goal remains unchanged: to provide all end consumers with quality fuel. Gazprom Neft is the first oil company to reorganize for the purpose of achieving even higher results both within the Gazpromneft gas station network and in the wholesale business. In particular, an important result the reorganization will bring to our wholesale customers will be greater transparency of our sales activities,” says Gazprom Neft Regional Sales Director Alexander Krylov.