EU charges Gazprom with abusing gas market prices

Russian energy giant faces $10bn fine as anti-trust regulators accuse it of overcharging buyers in ex-Soviet states.

Margrethe Vestager at Gazprom anti-trust enquiry
Gazprom risks fines of up to 10 percent of total sales, amounting to $100bn, if the claims are substantiated [AP]

European anti-trust regulators have charged Russian gas giant Gazprom with abusing its dominant market position in Europe by charging unfair prices to former Soviet states.

The European Commission accused state-owned Gazprom on Wednesday of significantly hindering competition in Central and Eastern European gas markets, where the company is by far the dominant supplier.

“Gazprom has been able to charge higher prices in some countries without fearing that gas would flow in from other countries, from resellers or where the prices were lower,” Margrethe Vestager, the Competition Commissioner who last week opened a similar high-profile case against Google, said.

Gazprom firmly rejected the EU accusations, insisting it adhered to trade laws in all the countries it did business.

“Gazprom considers the objections put forward by the European Commission to be unfounded,” the company said.

The commission, the EU’s powerful executive arm, said investigators found that Gazprom significantly hindered competition in eight former Soviet-era satellites that have cast their future with the EU, not Moscow. 

If the claims are substantiated, Gazprom risks fines of up to 10 percent of total sales, amounting to $100bn in 2013, according to the latest data available.

‘Not political’

“Artificial barriers were preventing gas from flowing from certain Central Eastern European countries to others, hindering cross-border competition,” Vestager said.

“All companies that operate in the European market – no matter if they are European or not – have to play by our EU rules.”

Vestager said that the Gazprom case, first launched in 2012, was straightforward and based strictly on competition policy despite what she acknowledged to be a highly charged political context.

“This is not political. This is a competition case, this is how we have proceeded. As always it is based on facts,” she said.

Al Jazeera’s Rory Challands, reporting from Moscow, said the recent easing of tensions in Ukraine may have prompted the EU to push this legal challenge now.

Lithuanian President Dalia Grybauskaite, a staunch Kremlin critic, welcomed the probe, seeing it as a strong message against Russia.

“The era of Kremlin backed political and economic blackmail draws to a close,” she said.

Source: Al Jazeera, News Agencies