Filling Stations under the Brand of TATNEFT Have Reduced Prices

Filling Stations under the Brand of TATNEFT Have Reduced Prices

It should be noted that the Company's filling stations network is supplied through goods purchased at the open market.
The average profitability of the filling stations network operating under the brand of OAO TATNEFT is 1.4% on average, which is the minimum rate for the stable operation of enterprises. Small profit remaining after payment of taxes is exclusively spent for the network expansion and modernization of filling stations.
As of December 31, 2010 OAO TATNEFT operated 497 filling stations in the composition of the network in 22 constituents of the Russian Federation, which employed more than 7,000 persons. In this case, the Company only has a market share that can be called substantial in 2 of the mentioned constituents: in Tatarstan (28%) and in Chuvashia (40%). The share of OAO TATNEFT in the other regions does not exceed 7%.
In January of this year the domestic market witnessed deficit of petroleum products that influenced the rise in the petroleum products suppliers' wholesale prices.
This situation was the reason of rising prices at the filling stations during the first decade of February, which rose on average by 1-4% depending on the region and the petroleum product type.
The prices at the filling stations declined down to 6% in the second decade of the month. The main reason for the decline is the reduction of prices by large retail players