EU charges Gazprom with abusing dominant position

Regulators accused Gazprom of charging unfair prices.

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By :  ,  Financial Analyst

Russian gas giant Gazprom Gazprom has been charged today (April 22nd) by the European Commission with abusing its dominant market position in Central and Eastern European gas markets.

Antitrust regulators said it raised barriers to competition in eight EU states, including the Czech Republic, Hungary and Slovakia. 

In five of those countries - Bulgaria, Estonia, Latvia, Lithuania and Poland - EU regulators accused Gazprom of charging unfair prices through calculations that link gas prices to oil prices. This follows more than two years of investigation.

The Commission said its preliminary view was that Gazprom was breaking EU anti-trust rules, adding that it may have limited its customers' ability to resell gas, potentially allowing it to charge unfair prices in some EU member states.

EU says charges are not politically motivated

It questioned the formulae the energy giant used to come up with the different prices at which it sold gas to individual countries.

"Gazprom's specific price formulae, which link the price of gas to the price of oil products, seem to have largely favoured Gazprom over its customers," it said.

Gazprom, which supplies about a third of the EU's gas requirements, rejected the Commission's accusations, calling them "unfounded". "Gazprom strictly adheres to all the norms of international law and national legislation in the countries where the Gazprom Group conducts business," the company said in a statement.

The move comes amid growing tensions between Europe and Russia over the situation in Ukraine, and some critics in Moscow argued that the accusations are politically motivated.

But Brussels refuted this. At a news conference, EU’s antitrust chief Margrethe Vestager said the case was based on facts. "Doing business in Europe implies having to comply with European rules and regulations," she said.

Brussels' competition authority has the power to impose fines of up to 10 per cent of Gazprom's global turnover. 

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