EU charges Gazprom over alleged gas market abuse

The European Commission has opened an investigation against energy giant Gazprom for allegedly abusing the gas market. It has sent a ‘Statement of Objections’ to the Russian state-owned company alleging […]

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By Priyanka Shrestha

The European Commission has opened an investigation against energy giant Gazprom for allegedly abusing the gas market.

It has sent a ‘Statement of Objections’ to the Russian state-owned company alleging some of its business practices in Central and Eastern European gas markets could amount to an abuse of its dominant position, breaking EU antitrust rules.

That includes reducing its customers’ ability to resell the gas cross-border, which could have led to Gazprom charging “unfair prices” in certain member states, the Commission said.

Its preliminary findings suggest Gazprom could be hindering competition in the gas supply markets in Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia.

EU Commissioner in charge of competition policy Margrethe Vestager added: “All companies that operate in the European market – no matter if they are European or not – have to play by our EU rules.

“I am concerned that Gazprom is breaking EU antitrust rules by abusing its dominant position on EU gas markets. We find it may have built artificial barriers preventing gas from flowing from certain Central Eastern European countries to others, hindering cross-border competition. Keeping national gas markets separate also allowed Gazprom to charge prices that we at this stage consider to be unfair. If our concerns were confirmed, Gazprom would have to face the legal consequences of its behaviour.”

The energy giant now has 12 weeks to respond and can also request an oral hearing to present its arguments.

Gazprom said it “strictly adheres” to all the rules of international law and legislation in the countries where it operates.

A spokesperson added: “We expect that within the framework of the investigation our rights and interests arising from both EU law and international law will be adequately observed and special attention will be paid to the fact that OAO Gazprom, being established outside of the jurisdiction of the EU, is a company which in accordance with the Russian legislation, performs functions of public interest and has a status of strategic state-controlled entity.”