Polish Oil and Gas Company (PGNiG) called on the European Commission on Thursday 18 May to fine Russian gas group Gazprom for breaching EU competition laws and to adopt preventive measures to ensure competitive conditions on the gas market.
“The violations committed by Gazprom have been long-lasting and serious. They have caused considerable damage to the gas market in Central Europe. This applies both to the competition in the gas market and to the financial losses incurred by the recipients of commodity. We would like to emphasise that Gazprom has not refrained from violating the competition law and, until this day, the company has not complied with its provisions”, said Piotr Woźniak, President of the PGNiG SA Management Board on Thursday.
In arguments presented to the Commission on Friday 19 May, PGNiG calls for penalties to be imposed on Gazprom for breaches of EU anti-trust law through its: - partitioning of Central and Eastern European gas markets, - excessive pricing policy towards customers; - conditioning gas supplies upon Gazprom’s maintaining or taking control over gas infrastructure.
The Polish gas company also calls on the Commission to impose preventive measures on Gazprom to prevent its infringing EU anti-trust rules in future.
It suggests granting Gazprom customers a one-time right to set a price formula in the contract. The formula would be related to prices in competitive European markets and include a mechanism for verifying the price in an arbitration procedure, thereby allowing the liberalisation of prices for consumers and preventing Gazprom from over-inflating them.
It suggests, further, requiring that Gazprom change the “Take or Pay” clauses by lowering the current maximum level of mandatory gas deliveries in long-term contracts for Central and Eastern European customers to a maximum of 75%, thus restoring competition between Western European energy companies which have signed flexible contracts with Gazprom and companies on which rigid conditions of long-term contracts have been imposed by Gazprom.
PGNiG also suggests imposing Gazprom’s divestment in selected companies which own transport (such as the OPAL and Yamal-Europe gas pipelines) and storage infrastructure in the EU.
Another of its suggestions is to oblige Gazprom to approve the introduction of network codes and bi-directional gas flows on all interconnectors between gas grids of the Central European member states and the Energy Community, eliminating the possibility of politically motivated reduction or suspension of gas supplies to Central and Eastern European countries.
Lastly, it calls for unconditional implementation of all third energy package principles on EU energy market liberalisation, in particular for the two Nord Stream gas pipelines.
Two years after sending a statement of objections to Gazprom as part of an investigation into abuse of dominant position in eight Central and Eastern European states that was opened in 2012 following a complaint by Lithuania (see EUROPE 10682), the Commission is closing in on a decision.
In October 2016, it came close to an amicable agreement that would have allowed the Russian gas company to avoid paying a heavy fine (see EUROPE 11655).
Competition Commissioner Margrethe Vestager said on 13 March that the Commission might be willing to accept the commitments made by Gazprom, which stands accused of abuse of its dominant position, but first wanted to hear the views of customers and other stakeholders and will carefully consider them before taking a decision. (Original version in French by Emmanuel Hagry)