Poland’s PGNiG urges tough stance in EU antitrust case against Gazprom

The Gazprom logo on display at the 16th Neftegaz International Exhibition. Moscow, April 2016. [Sergei Ilnitsky/EPA]

State-run Polish oil and gas company PGNiG urged the European Commission today (18 May) to take a tough stance in its antitrust investigation into Gazprom, saying the Russian company should have to pay a fine and sell assets.

On 13 March, the Commission published Gazprom’s commitments to end a five-year antitrust case and avoid heavy fines.

The case was opened after Lithuania blew the whistle on Gazprom’s anti-competitive practices.

Lithuania steps forward as whistleblower in Gazprom row

Lithuania has stepped forward to denounce pressure from Gazprom after the European Commission yesterday opened a formal antitrust investigation against the Russian gas monopoly for allegedly hindering competition in Central and Eastern European gas markets.

Suspicions about Gazprom’s conduct led the EU executive to launch raids in Central and Eastern European states in September 2011, to investigate firms involved in the supply, transmission and storage of natural gas.

EU raids Gazprom offices in anti-trust probe

Russian gas exporter Gazprom said it would cooperate with an EU competition probe of its units, while sources on both sides said yesterday (28 September) the real source of tension was Europe's fear of its growing reliance on Russian gas.

EU competition regulators said in March that concessions made by Gazprom following charges it has abused its dominant position in central and eastern European gas supplies should ease concerns of market abuse.

That provisional deal moved closer to ending one of Brussels’ longest-running antitrust probes, which could have seen Gazprom fined up to 10% of annual global turnover.

However, the deal is subject to feedback from some EU states and market players, and Poland, which imports most of the gas it consumes from Russia, said in March it would use “all legal means” to block the proposed settlement.

Poland to lead battle against Commission-Gazprom entente

Poland is spearheading criticism of the Commission’s proposed “entente” that would end a five-year antitrust case against Gazprom for abusing its dominant position in eight countries in Central and Eastern Europe.

“The European Commission should financially punish Gazprom and create competitive conditions on the gas market,” PGNiG said today, presenting details of the feedback it has to send to the Commission by Friday.

Chief Executive Piotr Wozniak told a news conference that Gazprom had abused anti-monopoly laws by, for example, setting different gas prices for different clients, imposing higher prices for some clients and linking its gas supplies with control over gas infrastructure.

“We have calculated every single cent we have overpaid for the gas,” Wozniak said, but declined to give a figure for this or the size of fine it was seeking for Gazprom.

PGNiG also said it wanted the Commission to take steps to prevent Gazprom from abusing its dominant position in future.

It said Gazprom should have to sell controlling stakes in companies that own key gas infrastructure in the EU, including the Jamal-Europe gas pipeline, as well as the Opal link and Katharina underground gas storage in Germany.

Wozniak said PGNiG was the last market participant to provide feedback in the EU’s antitrust case against Gazprom.

“Mostly everyone has focused on thier own market, but there is some agreement regarding the sale of infrastructure (…),” he said.

Other countries such as Bulgaria have signalled issues with the proposed settlement with Gazprom.

Bulgaria sees risks in Commission’s ‘entente’ with Gazprom

Sofia will hold a conference call with the European Commission today (28 April) to make known its positions concerning a proposal to end a five-year antitrust case with Gazprom. The Bulgarian press has unveiled some of the country’s concerns.

Asked by EURACTIV.com to comment on the replies received from the Central and Eastern European countries and the way forward, Competition Commissioner Margrethe Vestager said the Commission was still in the process of conducting a full overview of the comments made.

She also made it plain that fining Gazprom was not an option if the desired outcome was to be a commitment by the Russian monopolist to play by the rules.

“You can do a provision and a fine, and you can do a settlement and binding commitments, which may lead to a fine if commitments are broken”, she said.