EU faults Russian gas firm’s practices
MOSCOW — The European Commission has accused Russia’s Gazprom energy giant of abusing its dominant position in Central and Eastern European natural-gas markets in a move that threatens to exacerbate strained relations with Moscow.
Unveiling the preliminary results of an antitrust investigation, the Brussels-based commissioners said Wednesday that Russia’s naturalgas monopoly was hindering competition in eight European Union member states: Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia.
“All companies that operate in the European market, no matter if they are European or not, have to play by our EU rules,” said Margrethe Vestager, the commissioner responsible for competition policy.
Gazprom rejected the commission’s findings as “unfounded” and suggested that it had been unfairly singled out.
The company said its business practices in European Union markets, including pricing formulas, were “in full conformity with the standards observed by other producers and exporters of natural gas.”
Gazprom accounts for about 30% of European Union states’ gas imports, but countries in Central and Eastern Europe that were once part of the Soviet-era Comecon trading bloc are disproportionately dependent on Russian gas because of their inherited distribution infrastructure.
European Union gas market regulators launched an investigation of Gazprom’s business practices after conducting antitrust raids on some of the energy behemoth’s European offices in 2011.
Unveiling the preliminary results of the inquiry, the commission complained that Gazprom had used its commanding position in the region to demand high prices and restrict its customers’ ability to secure supplies from other sources.
The commissioners’ objections focused on Gazprom’s use of so-called destination clauses in gas contracts that bar importing countries from selling supplies to other states. By blocking onward sales, Gazprom was able to demand higher prices from countries heavily dependent on direct gas supplies from Russia, the commission said.
Since the investigation was launched, relations between Russia and EU states have been further strained by Ukraine’s crisis; the nation is a conduit for more than half the gas Russia supplies to Europe. The EU has imposed sanctions on Russia to punish its seizure and annexation of Ukraine’s Crimea region last year.
Ukraine was until recently Gazprom’s biggest foreign gas buyer but cut back Russian purchases amid escalating disputes over gas prices and transit terms.
Gazprom has 12 weeks to reply to the commission statement of objections and can also request a hearing to contest them.