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EU welcomes Gazprom competition commitments

Okhta centre, building stage, St Petersburg. 2008. Image source: Wikimedia via George Shuklin. Photograph: (Others)

AFP Brussels, Belgium Mar 13, 2017, 02.38 PM (IST)

The European Union on Monday welcomed commitments by Russian state-owned gas giant Gazprom to allow for increased competition in east European markets, once its exclusive preserve.

The EU has been investigating Gazprom since 2015 over claims it abused its dominant position in these markets, with the dispute getting caught up in growing tensions between Brussels and Moscow over the Ukraine crisis.

EU Competition Commissioner Magrethe Vestager said Gazprom had now come forward with remedies meeting these concerns and invited competitors and customers to comment as part of the EU process of deciding whether they are acceptable.

"We believe that Gazprom's commitments will enable the free flow of gas in Central and Eastern Europe at competitive prices," Vestager said in a statement.

"They address our competition concerns and provide a forward looking solution in line with EU rules. In fact, they help to better integrate gas markets in the region," she said.

Gazprom is the dominant gas supplier in a number of central and eastern European countries.

When Commission launched its probe in 2015 it said it believed the company "had been breaking EU antitrust rules by pursuing an overall strategy to partition central and eastern European gas markets."

The statement said the remedies offered should ensure that "restrictions to re-sell gas cross-border are removed once and for all" and that prices should accordingly come into line with competitive benchmarks.

Gazprom will also not be allowed to take undue advantage of infrastructure which it had "obtained from customers by having leveraged its market position in gas supply," the statement said.

Under EU rules, a company found in breach of anti-competition rules is liable to a fine of up to 10 per cent of annual sales, in Gazprom's case nearly 83 billion euros in 2015.

Last week, Vestager also lifted EU objections to Russian investment in a controversial Hungarian nuclear plant project worth 12.5 billion euros.

(Reuters)

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