Polish chemicals industry pushes for a greater gas tariff reduction

28 November 2012 10:56  [Source: ICIS news]

LONDON (ICIS)--Last-minute lobbying efforts are under way to try to secure Poland's chemical industry a gas tariff reduction of far more than the 3.3% proposed by dominant supplier PGNiG, a source at the Polish Chamber of the Chemical Industry (PIPC) said on Wednesday.

“It is a delicate matter at the moment, but given that PGNiG in early November won a substantial and unprecedented price cut on Russian gas exports of Gazprom, PIPC would like to think a meagre 3.3% is just not acceptable,” the source said.

PGNiG has proposed to the Polish Energy Regulatory Office (ERO) that Poland's chemical producers, which together make up the supplier's biggest industrial customer, should in common with other industrial consumers be awarded a 3.3% cut from January 2013, compared to a 10% reduction for retail end-users.

The ERO and ministers have been advised by PGNiG that despite the deal with Gazprom, which analysts forecast might pave the way for gas price cuts of towards 10% for all users, it is struggling to break even on gas trading.

In a note to investors, Prague-based investment bank WOOD & Company said it labelled the 3.3% proposal as “neutral for PGNiG, but negative for large industrial users (chemical companies in particular) and negative from the perspective of the structure of the gas market, as it appears that high industrial tariffs are to subsidise artificially low residential tariffs”.

Annual consumption of gas in Poland tops 14bn cubic metres, with around 10bn of that imported from Russia. The chemical industry accounts for approximately one-third of that consumption.

By: Will Conroy
+44 20 8652 3214

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