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Lukoil to decide on selling all its gas stations in Russia by year’s end — source

April 07, 2017, 21:08 UTC+3 MOSCOW

Now the company is accepting applications from potential investors, the source said

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MOSCOW, April 7. /TASS/. Russian oil major Lukoil may decide by the end of the year to sell all of its gas stations in Russia, a source in the company told TASS.

The company has already received three bids for the acquisition of gas stations and soon it will send offers to potential foreign investors, the source said.

"By the end of the year, Lukoil may decide on selling all gas stations in Russia. The company's management was offered several options for selling the business: to sell one third of the network of gas stations in three parts during the year - by 10% a quarter, to look at the market situation and if there are negative factors - to sell all Russian gas stations in the next two years," the source said.

According to the source, the management has chosen the second option.

"Now the company is accepting applications from potential investors. They have already received three bids. Also they have prepared proposals for long term investors and they will be sent in coming days," the source said.

The press service of Lukoil declined to comment.

A source with the company told to TASS that the retail fuel business means economic and reputational costs for the company.

"With extremely low profits, we cannot raise prices at gas stations, as this causes social discontent," the source said.

According to the source, the optimization of the company’s retail network will be carried out in any case.

"It is unlikely that the parameters of the tax maneuver will change and that companies will be allowed to hike prices, and we are limited in the development of the non-fuel group of goods. The share of Russian retail business (gas stations) in Lukoil's total revenue is not high, therefore, retail business is not a priority for the company," the source concluded.

Earlier Lukoil's president Vagit Alekperov said that the company is considering the possibility of selling low-profitable assets, including gas stations and the Ukhta refinery.

The tax maneuver in the oil sector, which came into force on January 1, 2015, implies a reduction of crude export duties to 30% in 2017 from the present 42%, simultaneously raising the mineral extraction tax. The tax maneuver is aimed at reducing the dependence of the Russian budget on export duties, which go down following global oil prices.

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