Polish LNG incumbent PGNiG engages in practices which may be harmful to market liberalization – consumer watchdog

Contracts signed with Poland’s LNG incumbent, PGNiG, have been found to contain clauses which may be detrimental to the liberalization of the natural gas market, competition and consumer watchdog, UOKiK, announced on Jan. 27.

“The UOKiK CEO obliged PGNiG to change practices which hindered the liberalization of the [natural] gas market in Poland,” UOKiK wrote in a statement.

An investigation carried out by the watchdog found that certain clauses in PGNiG’s contracts, signed with both retail and wholesale clients, limited the possibility of decreasing the amount of fuel being purchased,  as well as its resale, making the changes subject to consent from PGNiG. The company also placed limits on the amount of fuel which could be resold by clients.

Other clauses deemed to be contrary to liberal market practices included  the limiting of an automatic extension of contracts between old and new gas traders.

“The practices used by the dominating company could have a negative effect on the liberalization of the gas market as they hindered the activities of entrepreneurs who resold gas acquired on a wholesale basis from PGNiG, and could have even led to their [entrepreneurs] being eliminated from the market,” UOKiK wrote.

The watchdog announced that the decision was made based on both Polish and EU laws. If fined PGNiG could be forced to pay a penalty equal to 10 percent of its revenues attained in the year proceeding the UOKiK decision.