Energy Commodity Exchanges in Russia: Protection Against Shocks or Monopolies?

The development of commodity exchanges is promoted as one of main competition policy directions in Russian energy markets. Exchange trade has a number of procompetitive effects based on reduction of market transaction costs, as well as on prevention of price manipulations. Those effects in their turn contribute to less painful coping with economic shocks and imbalances, which acquires a special importance amid crisis circumstances of 2020 and 2022. However, exchange trade is connected with its own risks and constraints, in particular under the shortage of liquidity, excessive market concentration or abusive practices supported by a weak regulation. This paper contains the empirical analysis of the dependence between structural and pricing indicators in the markets for natural gas and diesel fuel on Saint-Petersburg International Mercantile Exchange. It is discovered that the excessive concentration in natural gas markets negatively affects price stability and market liquidity - development of this trading segment requires more active involvement of independent suppliers. At the same time, this involvement should be realized not by directive measures but by additional opportunities of exchange trade. This dependence is more complicated in markets for diesel fuel - it is necessary to continue the policy of supporting the volume of liquidity while increasing the attractiveness of the trading conditions for different groups of market participants. As such, there should be different policies to promote commodity exchanges developments in different markets, and those policies may change follow market evolution. At the same time, discretionary anti-crisis measures should be avoided, if they increase uncertainty on commodity exchanges and lower incentives for their development.