European Interest

European Commission imposes obligations on Gazprom

Flickr/Sergey/CC BY-SA 2.0
Symbolic pipes near a Gazprom regional office.

The European Commission on May 24 adopted a decision imposing on Gazprom – the main gas supplier in many Central and Eastern European countries – a new set of obligations. The aim is to address competition concerns and enable the free flow of gas at competitive prices for the benefit of European consumers and businesses.

“All companies doing business in Europe have to respect European rules on competition, no matter where they are from,” said Commissioner in charge of competition policy, Margrethe Vestager. “Today’s decision removes obstacles created by Gazprom, which stand in the way of the free flow of gas in Central and Eastern Europe. But more than that – our decision provides a tailor-made rulebook for Gazprom’s future conduct. It obliges Gazprom to take positive steps to further integrate gas markets in the region and to help realise a true internal market for energy in Europe. And it gives Gazprom customers in Central and Eastern Europe an effective tool to make sure the price they pay is competitive.”

According to the Commissioner, this case is not about the flag of the company. “It is about achieving the outcome that best serves European consumers and businesses,” she explained. “And the case doesn’t stop with today’s decision – rather it is the enforcement of the Gazprom obligations that starts today.”

Among the obligations set by the Commission, Gazprom should remove any restrictions placed on customers to re-sell gas cross-border. The company is also required to facilitate gas flows to and from isolated markets. Also, Gazprom customers should be given an effective tool to make sure their gas price reflects the price level in competitive Western European gas markets, especially at liquid gas hubs.

What is more, Gazprom should not be allowed to act on any advantages concerning gas infrastructure, which it may have obtained from customers by having leveraged its market position in gas supply.

According to a Commission press release, Brussels can impose a fine of up to 10% of the company’s worldwide turnover if the obligations are not met.

In response to the Commission, Gazprom has offered its own commitments, which have been published on the Commission’s  (competitions website).

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