Region: EC and Gazprom reached an agreement on gas markets in central and eastern Europe

6. June 2018. / SEE Energy News

Russian gas company Gazprom has agreed with the European Commission (EC) to make a concession in order to eliminate complaints of abuse of the dominant position in eight countries in central and eastern Europe, thus avoiding a penalty that could reach up to 10 % of the company’s global turnover. The agreement ended a procedure that lasted seven years.

Competition Commissioner Margrethe Vestager said that all companies operating in Europe must comply with European competition rules, regardless of where they originate, adding that the agreement removes obstacles which Gazprom used to prevent free gas flows in central and eastern Europe, but it also provides for specially adapted rules to regulate future Gazprom’s behavior on the market, which would ensure that customers in affected region pay competitive prices. It commits Gazprom to take positive steps to further integrate gas markets in the region and help realize the unification of the European gas market.

Among other things, Gazprom has to remove all restrictions imposed to customers in terms of cross-border resale of gas, and has to enable free gas flow to countries in central and eastern Europe which are isolated from other EU member states due to a lack of gas infrastructure, namely the Baltic states and Bulgaria. If Gazprom violates any of these commitments, the EC may impose a fine of up to 10 % of the company’s global turnover, without further proof of the violation of EU antitrust regulations.

In April 2015, the EC has officially accused the Russian gas company Gazprom for abuse of dominant position in the gas market in central and eastern Europe. Gazprom received the statement of objections which indicates that dominant position of the company in the market is against EU antitrust regulations. In particular, EC accused Gazprom for interference with cross-border sales of natural gas, charging prices that are not fair and setting additional conditions for gas deliveries. In a document addressed to Gazprom, EC stated that the preliminary investigation found that the Russian company prevents competition in the markets of eight EU member states: Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia.

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