Lithuania calls for further committments from Gazprom to end EU anti-trust case

By bne IntelliNews May 4, 2017

Gazprom’s commitments to lessen the impact of its dominant position as a supplier of gas to Lithuania and other CEE countries are not sufficient and the European Commission should ensure they are revised, the Lithuanian government said on May 4.

The Russian gas giant proposed at the end of 2016 a set of measures to address the commission’s concerns on the conditions of gas sales to the EU member states in the CEE region in a bid to end an ongoing anti-trust case. Brussels asked CEE states to respond to the suggestions. Vilnius claims that the proposal is no longer sufficient because market conditions have changed.

“The commitments assumed by the Russian gas company are no longer in line with the current market conditions and in the long run fail to ensure that Gazprom would not continue to abuse its dominant position and to restrict competition,” the Lithuanian energy ministry said in a statement.

Gazprom’s proposals followed earlier hints from Brussels and Moscow that a settlement was possible to end the five-year legal dispute. A settlement would spare Gazprom potentially huge fines and remove some pressure on the Russian company to conform to EU energy market rules. 

Many CEE member states view the proposed compromise as letting Gazprom off the hook for years of dictating prices, preventing cross-border gas sales, and tying gas supply to pipeline investment. A key offer by the Russian company is to allow customers to re-export gas it has bought, which would help break the geopolitical leverage Gazprom's dominance of CEE markets hands Moscow.

However, Lithuania proposes Gazprom must also be obliged to keep its prices in line with gas price fluctuations on Western European trading platforms, adjusted for the lower cost of delivery, because of Lithuania’s proximity to Russia. Vilnius also proposed that the commission force Gazprom not to limit the number of gas delivery points to Europe.

Lithuania also claims that unfair pricing by Gazprom has cost it some €1.5bn over the years, and that the current proposals to end the dispute with the EU do not guarantee compensation. 

According to the ministry, pushing Gazprom to revise its proposal for the settlement of the anti-trust case would reflect the current conditions on the gas market, such as the dominance of short-term supply contracts and the functioning of the Lithuanian LNG terminal through which the Baltic states ensures supply from sources other than Russia.

 

 

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