Thursday, March 16, 2017

"Gazprom" often offer an opportunity to renegotiate prices

"Gazprom" offers the possibility of new contractual relations under which Bulgarian customers to pay a competitive price and request a renegotiation it, if it deviates from the reference prices in Western Europe, including the prices of competitive hub. Such price revisions in contracts should be able to do more often and to clarify in what moments are made. This should help gas prices in Bulgaria are more closely tied to those formed in EU markets where there are sources other than Russia and the prices competitive. These are some of the suggestions of "Gazprom" to the European Commission, which the company hopes to be terminated its operation of gas markets in Central and Eastern Europe. The Commission communicated to them on Monday and invited all interested parties to provide comments.  "The fact that the European Commission moved procedure is good news. As an interested party, we will have our position within two weeks," said deputy executive director of the gas distribution company "Overgas Inc." Svetoslav Ivanov, in which "Gazprom" still has nearly 50 % share.

Among these suggestions are more:

"Gazprom" undertakes not want benefits from Bulgarian partners in the "South Stream" because of the termination of the project. This does not affect whether those claims would be generally valid. This is the compromise proposed by the Russian company on suspicion of the commission that takes advantage of its dominant position on the market for supply of gas to gain advantages associated with access to gas infrastructure or control.
"Gazprom" proposes to remove all contractual barriers to the free transfer of gas in Bulgaria and 7 other countries and take concrete actions to better pricing and integration of these markets.
- Moreover, the company is committed to remove market segmentation to remove all direct and indirect contractual restrictions that prevent its customers to resell abroad purchased gas or resale make this economically unattractive to customers.
- "Gazprom" undertook to make changes in the relevant agreements, so as to provide Bulgarian operator of the gas transmission infrastructure control over cross-border flows of gas and facilitate the conclusion of agreements on interconnection between Bulgaria and its neighboring EU countries, more particularly Greece.
What next. If these proposals are acceptable to Bulgaria, Czech Republic, Estonia, Latvia, Lithuania, Poland, Hungary and Slovakia, as well as anti-trust authorities in Brussels, commitments may be shaped in a decision legally binding on "Gazprom".
This means that the Russian side will most likely be discontinued anti-trust investigation, the commission - if the company violates its commitments - can impose a fine of up to 10% of the global turnover of the company without having to prove the existence of violation of EU antitrust rules. Commissioner policy competition Margrethe Vesteger said: "We believe that the commitments of" Gazprom "will allow unrestrained gas at competitive prices in Central and Eastern Europe. These commitments distract our concerns regarding competition and provide prospective decision in accordance with EU rules. in fact, they help to achieve better integration of the gas markets in the region. "
The Commission considers that the commitments of "Gazprom" meet its objectives in relation to each competition concern, namely by ensuring that:
- Restrictions on cross-border resale of gas finally removed; cross-border gas transmission to central and eastern European gas markets has eased
- Gas prices in Central and Eastern Europe reflect competitive pricing benchmarks
- "Gazprom" can not benefit from any advantage on gas infrastructure received from customers, taking advantage of its market position in the field of gas supply.
However, the Commission recalls that effective competition in the Central and Eastern European gas markets depends not only on the application of EU rules on competition and investment in the diversification of gas supply, targeted European and national legislation in the field of energy and proper application.
For Bulgaria suggestions of "Gazprom" affect another question - to allow customers in Hungary, Poland and Slovakia to request delivery of all contracted gas or part of it to the entry points in the Baltic States and Bulgaria. This will allow those customers to seek new business opportunities even before it was finished connecting gas infrastructure. Of "Gazprom" will be allowed to charge a fixed and transparent service fee corresponding to the fee that would be charged the company.

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