Gazprom makes concessions, eases EU concerns

BRUSSELS, March 13, 2017 – The European Commission said on Monday that Gazprom’s latest proposals could solve lingering anti-trust concerns, as international media reported that the price of Russian gas for Germany rose the most in years last month.

“We believe that Gazprom’s commitments will enable the free flow of gas in Central and Eastern Europe at competitive prices,” Margrethe Vestager, commissioner in charge of competition policy, said in a statement following a Gazprom proposal to allow price revisions in its long-term contracts.

“We now want to hear the views of customers and other stakeholders and will carefully consider them before taking any decision.”

In April 2015, the Commission started an investigation into allegations that the long-term contracts Gazprom was signing with clients in Eastern and Central Europe were violating anti-trust regulations, most notably by preventing the free trade of gas in the region.

Having taken all views into account, it may now decide to drop the case, making Gazprom’s recent commitments legally binding.

“If a company breaks such commitments, the Commission can impose a fine of up to 10% of the company’s worldwide turnover, without having to prove an infringement of the EU antitrust rules,” the Commission’s press release added.

The news came as Bloomberg reported that the price of Gazprom-supplied gas at the German border had risen some 50% since last September, including by 14% to USD 5.88 per million BTU in February. It was the steepest monthly jump in 7 years, after prices hit a 12-year low last year.

“We’ll likely see a further upward trend in Gazprom prices, especially strong in the second quarter,” Deutsche Bank expert Pavel Kushnir told Bloomberg.

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