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Poland’s PGNiG sues Gazprom over gas pricing

21 February 2012 12:19 (UTC +04:00)

Poland buys over two thirds of the gas it consumes from abroad. Annual imports stand at around 10 billion cubic metres of gas each year, with around 90 percent of that from Russia.

PGNiG, which controls production, transmission and distribution of gas in Poland, is struggling to make profit, squeezed both by its contract with Gazprom and by regulator URE, which sets prices on the domestic market.

The price in PGNiG’s deal with Gazprom is linked to oil prices, which are now at eight-month highs, with only the 10 percent strengthening of the zloty against the dollar this year easing the pain.

The regulator has yet to make a decision on a new tariff. State-controlled PGNiG asked for a more favourable tariff in October and has since responded to several requests from the regulator for further documentation.

Many European utilities have asked for concessions from Gazprom after incurring multi-billion euro losses in 2011 stemming from high long-term contract prices.

Top of their wish list is a reduction in the proportion of the gas that is indexed to oil prices in favour of more spot-indexed pricing of gas, making the fuel cheaper.

In January, Gazprom yielded to requests from several European companies for easier gas supply terms, but PGNiG was not on that list.