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Polish PGNiG ordered to offer new natural gas contracts to industrials

13 Apr 2012 15:23:10 | esgm

Polish natural gas incumbent PGNiG must offer all its industrial customers new supply contracts over the coming months, or face being fined €10,000/day, Poland's Office of Competition and Consumer Protection (UOKiK) said on Friday.

The office ruled that through PGNiG's dominant position as supplier of 98% of the retail market and via the structure of some of its contracts - which, in some cases, included a 15-month time lag to terminate the deal - it was potentially abusing its position as incumbent. The supplier could also have been in breach of EU competition law, the body said.

No direct fine was imposed by UOKiK on Friday, as PGNiG had already begun to change the contract structure for its larger end-users during the investigation.

Nevertheless, the antitrust body has instructed PGNiG to draw up new contracts that must be offered to all industrials in the coming three months, even if the end-user's deal is not due for renewal.

Any contracts that are being replaced in the coming months should be based on a new one-month lag termination clause.

By the end of January 2013, UOKiK wants PGNiG to submit reports on all the contracts that have been changed. The watchdog will also require the incumbent to explain why a customer that was offered the new contract chose not to move to the new terms, should this happen.

A €10,000/day fine will be imposed if PGNiG fails to suggest the new contract to all industrials.

UOKiK said the new contracts will make it easier for supply-switching during the start of market liberalisation, which will begin in earnest later this year.

The antitrust body launched the investigation in July last year. At the time, PGNiG refuted the claim made by UOKiK (see ESGM 2 August 2011). There was no comment from the incumbent on the findings on Friday, however.

Friday's ruling by UOKiK is not final, as PGNiG is able to take the matter to a court of appeal.

The gas incumbent is also the subject of an entirely separate ongoing investigation, which began early last year, by UOKiK concerning market abuse on the wholesale gas market (see ESGM 5 January 2011). TMM

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