The European Commission (EC) has begun investigating Russian company Gazprom over possible breaches in EU antitrust law. The Russian energy firm, which supplies natural gas to Romania and owns the NIS chain of petrol stations, stands accused of blocking competition in Central and Eastern European gas markets, thus breaching EU antitrust regulations. “The Commission has concerns that Gazprom may be abusing its dominant market position in upstream gas supply markets in Central and Eastern European Member States, in breach of Article 102 of the Treaty on the Functioning of the European Union,” reads the EC statement.
The EC is investigating three possible breaches by Gazprom; first the division of gas markets by preventing the free flow of gas between EU states and second, stopping diversification of gas supplies. Thirdly, Gazprom linking gas prices to oil prices may have resulted in unfair costs for EU customers.
EU legislation bans “the abuse of a dominant position which may affect trade between Member States” and when such cases are suspected, the EC can carry out antitrust proceedings. The EC has informed Gazprom and the competition councils in EU states concerned that investigations have begun.
In response, Gazprom wrote in a statement: “We expect that the investigation will duly respect our legal rights and legitimate interests based on the European and international law, and that it will be taken into account that Gazprom, registered outside the jurisdiction of the EU, is a business entity empowered, according to the legislation of the Russian Federation, with special social functions and a status of a strategic organization, administered by the government.” The company also said it was yet to receive the official notification from the European Commission.
Russian gas firm OAO Gazprom accounts for around a quarter of Europe’s natural gas supply. Romania can supply up to 80 percent of its natural gas needs internally, but Gazprom is the vital supplier of the between 20 and 25 percent of gas that is imported. The Russian company ended the first quarter of 2012 with a profit of some EUR 9 billion, down 24 percent year on year.
Liam Lever, liam@romania-insider.com
(photo source: Gazprom)