Gas price hike demonstrates monopoly woes of Polish chem firms

04 July 2011 17:51  [Source: ICIS news]

LONDON (ICIS)--Poland's chemical producers will be hit by a 9% natural gas monopoly price increase from 15 July, which underlines the need for the liberalisation of the Polish gas industry, the Polish Chamber of the Chemical Industry (PIPC) said on Monday.

The tariff hike, to be introduced by gas monopoly PGNiG following approval from the Polish Energy Regulatory Office (URE), could decrease the profitability of Poland's chemical industry by about 3%, PIPC estimated.

Noting that gas accounts for two to three-fifths of production costs for many of the affected chemical firms, PIPC reiterated that it was vital that Poland builds gas pipeline infrastructure that would end PGNiG's monopoly by offering industrial consumers access to EU spot prices.

PIPC itself has drawn up a proposal to interconnect the gas grids of Poland and Germany, but the treasury ministry opted not to recommend it for public subsidies, claiming it would do no more than offer another route into Poland for the already dominant Russian gas. The URE has said gas market liberalisation could begin in 2012. 

PGNiG defended its tariff hike, saying that international gas prices have risen in line with the rise in oil prices. The company largely sources its gas from Russia.

By: Will Conroy
+44 20 8652 3214

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