Decision On the Concept of forming common market of oil and petroleum products of the Eurasian Econo
Name and Surname: Alina Demokratova
Date: 26/01/2018
Word count: 488
Research Task One: Primary Legislative Acts
Document:
Act: Decision No. #8 of the Supreme Eurasian Economic Council date 31 May 2016
Institution: Supreme Eurasian Economic Council
Title: On the Concept of forming common market of oil and petroleum products of the Eurasian Economic Union
Commentary:
On May 31, 2016, the Supreme Eurasian Economic Council decided to approve the Concept of forming common market of oil and petroleum products of the Eurasian Economic Union, which was proposed on May 29, 2014. In accordance with this act, the present Concept is mainly designed in order to form common markets of oil and petroleum products among member states of Eurasian Economic Union. Moreover, creation of common market pursues following goals and objectives: a) provision of sustainable economy, energy and environmental security of member states; b) raise of economic efficiency in the field of extraction, transportation, supply, sale of oil and petroleum production in the territories of the member states; c) rising level of economic integration and competitiveness of member states in the world market. Furthermore, in order to form common market of oil and petroleum products and achieve goals above, necessarily objectives and regulations were accepted. The first objective is development of reciprocal trade among member states of the Eurasian Economic Union by creating an exchange trading mechanism. The second objective is elimination of entering barriers to exchange commodity market within Union. The third is a unification of norms and standards of oil and oil products of member states. The fourth objective is information exchange among member states about extraction, sale, transportation and supply of the oil and petroleum products. The fifth is a unification of norms and standards of oil and oil products of member states. These and other objectives bring the Concept to the following regulations: in accordance with the first objective of the Act Decision No. 8 exchange and non-exchange market of the oil production of the member states would be regulated. Moreover, Decision No. 8 is trying to regulate transparency of the pricing and fair competition on oil production respectively. Next, custom tariffs, and taxations of the common market would be regulated. However, regarding to the document each member state would trade based on their national currency.
Regarding to the mentioned goals of the Concept, it is quite apparent that formation of common markets of oil and petroleum production among member states of the Union mostly focused on sustainable economic development of each member state in general and raise of oil extraction and sale of it within these five states’ territories and in the world market. Eurasian Economic Union member states are not part of the OPEC and are less competitive in crude oil export in the world market respectively. Moreover, EAEU member states can not boast of huge oil reserve of crude oil as OPEC members can. Therefore, common market possibly might bring favorable economic development in the oil production of the member states. Also, emerging of such common market may attract more demanders and opportunities to be in beneficial relationships with other states. Furthermore, almost unification of the standards of the oil products among these countries and sharing of information can also contribute to the further progress of oil extraction.