"We do not foresee sharp fluctuations. It would be good if prices stabilised," he told journalists at a meeting in the Moscow office of the St Petersburg International Commodities and Raw Materials Exchange held to mark the first trading in diesel and jet fuel.

The Deputy Prime Minister said that oil companies "submitted an initiative to the Energy Ministry on obligatory fixed-price supplies of requisite amounts of petrochemicals to power generating companies during the autumn and winter season between September 20 and March 1".

Mr Sechin thanked the companies for that decision, which would allow supplying fuel to the domestic market now that customs duties on crude were going down.

In addition, the Government should scrutinise the oil companies' proposal to raise the mineral tax exemption minimum for oil from $15 to $25 per barrel. "In view of the plummeting market, the Government should scrutinise this proposal of the oil companies" in terms of federal budget possibilities, the Deputy Prime Minister said. It should consider possible revenue shortfalls and balance all elements, Mr Sechin said.

He also said that the Government might soon make a decision on the construction of the BPS-2 Baltic pipeline system. "Work on the project is under way. The decision of principle to build it has been made, but the technical aspects of the project need further consideration," Mr Sechin said.

He said he would report to the Prime Minister on ways to encourage suppliers. "The point in question is preliminary trading and techniques of uninterrupted trading," the Deputy Prime Minister said. "In the future, we will need to decide on reliable commodity supplies for that venue, and search for ways to stimulate suppliers," he said. There are some "practical ideas, which will be discussed today," Mr Sechin said. "I think we will report to the Prime Minister on the results of their discussion."