Saint Petersburg's Stock Exchange has been chosen as the first Russian bourse for oil products. It's due to begin trading in the first quarter of next year.

Russia's Economics Ministry chose the SPX because of its experience in commodities and readiness to invest more than $US 10 million of its own money in the project.

Deputy Economic Development Minister Kirill Androsov says the state will now buy at least 15% of the fuel it needs through the St Petersburg bourse.

“We want to bring the state order, state demand for these oil products, because there will be orders from the military service, from our agricultural sector, from the municipal sector. We want to be sure that the enterprise being established is transparent,” said Mr Androsov.

The 17-year-old Saint Petersburg stock exchange is now the third active Russian trading floor by volume. It already trades raw materials including metals, timber, and grain.

But most oil product deals in Russia are currently done directly with refineries, with individual price agreements brokered by middlemen.

The director of the Saint-Petersburg Exchange says there will be instruments to attract all market players, if the government plays its part.

“It will succeed if the government makes it compulsory for all companies to sell 20% of their oil products through the bourse,” proposed Viktor Nikolaev, the president of the Saint-Petersburg Exchange.

The government wants to establish a fair market price for Russian oil products by trading them on an exchange.