Thursday, April 23, 2015

The European Commission hits Gazprom – Onet.pl

1. Yesterday, the European Commission announced in a statement that the Russian company Gazprom set allegations of abuse of market power in 8 markets of Central and Eastern Europe – the three Baltic states of Lithuania, Latvia and Estonia, and the Czech Republic, Slovakia, Hungary, Bulgaria and Polish (and thus all countries in this part of Europe, with the exception of Romania).

After several years of careful study by the European Commission of the case (also carried out unannounced inspections at Gazprom subsidiary companies and their partners in the EU Member States, eg. in Poland PGNiG Gaz-System and EuRoPolGaz), Gazprom erected three grounds: to enforce the ban on free circulation of gas purchased from Russia (eg. non-re-export), forced to take control over the transmission network in each country, and finally the abuse of indexing gas prices relative to oil prices and unfair differentiation gas prices for individual EU countries.

This kind of reprehensible practices were used by Gazprom in the last 10 years (control covered the period of time of these countries in the EU), and all of them, unfortunately, occurred on the Polish market.

2. Recall only that negotiated in 2010 with the Polish gas contract, Gazprom got everything that just demanded (the extremely passive attitude Tusk’s government in this matter, surprises today, was a cause for astonishment inspectors from the European Commission).

bought gas pricing formula based on the prices of crude oil and the price much higher than those at which Russia sells gas to countries of Western Europe, the prohibition of re-export of gas bought by Poland, Russia, the option to take and pay (and thus pay even if you do not you are able to gas used), putting power in the company Gazprom EuRoPol Gaza and bring the company to the brink of profitability because the prices for the transmission of gas to Germany were lower than those paid Gazprom in Belarus and Ukraine, the Russians finally spared tens of millions of USD punishments that should pay EuRoPol gas to it only important concessions to the Russians.

The Russians were just unhappy with the need to establish a new operator on the Yamal pipeline which Gaz-System but fortunately it had already requested the European Commission firmly raising objections to the prior agreement of the Russian – Polish .

3. All this meant that the prices paid by PGNiG for Russian gas were and are clearly higher than those paid by Western European countries.

Recently, the Russian Interfax news agency presented a summary of average prices of gas sold by Gazprom to major European customers.

According to this report, the average price for 1000 m3 of gas in 2013-2014 was the Polish respectively 429 and 379 USD; for Germany and 323 366 USD; Slovakia 438 and 308 USD; for Austria 402 and $ 329; Hungary USD 418 and 338; for Italy 399 and US $ 341, and finally to France, 404 and 338 dollars.

The average price of Russian gas for 1000 m3 for the countries of Western Europe (with Turkey but without the 3 Baltic countries), were according to data presented by Interfax in in 2013-2014, respectively, 385 and 341 dollars.

According to the same agency Interfax in 2012, the average price of gas sold to Western Europe amounted to approximately US $ 440 per 1000 m3, while Poland paid was around $ 500 for 1000 m3.

So Polish paying a few dozen USD more per 1,000 m3 of gas from Russia than other countries in Western Europe and more than the average price at which Gazprom sold gas to these countries.

Due to the decline in oil prices in 2014 and 2015 also dropped the price of Russian gas only that the Polish are still significantly higher than for other Western European countries.

And because our country buys from Russia more than 11 billion m3 of gas is assuming that the average price of gas to Poland was about $ 50 higher than for the other countries of Western Europe, Gazprom paid at least $ 550 million (or approximately 2 billion zł) per year more than we should.

4. The European Commission Gazprom putting so heavy charges, may penalize the company penalty of up to 10% of its turnover (and thus the punishment of even several billion US dollars), and probably after the first objection, the Russian company will want an agreement with the European Commission and the payment of the penalty considerably less.

We have to keep an eye on its final shape, after all, Poland abuse of market power by Gazprom, was hit hardest and cost us all at least several billion additional expenses, which were sold in the prices of gas in Poland.

The maintenance of the EC to Gazprom charges even if the agreement is concluded, it will give Poland an extremely powerful weapon in your hand for future gas negotiations with the Russians.

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