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Monopoly prices for gas reduce EU’s competitiveness

Thursday, October 3, Vilnius - President Dalia Grybauskaitė met with the Vice President of the European Commission and Commissioner for Competition, Joaquín Almunia.

 

The President underlined that unfair energy prices posed a major obstacle to the EU competitiveness. Abuse of monopoly position by the Russian gas concern Gazprom in Lithuania and other Eastern and Central European countries contravenes the free-market principles and harms the competitiveness of Europe.

 

"Unfair gas prices harm the competiveness of Europe as a whole. In the absence of alternative gas supplies and competition, energy consumers - people and businesses - are compelled to pay the prices dictated by the monopolist. This impedes the sustainable economic development and growth, undermines the well-being of people," the President said.

 

At present, consumers in Lithuania pay for gas approximately 30 percent more compared to other European countries.

 

The European Commission last year launched a probe into an alleged abuse of dominant position by Gazprom in Lithuania and elsewhere in Eastern and Central Europe. The probe aims at finding out abuse cases of unreasonable gas pricing, impediment to diversification of gas supplies and free movement of gas among the member states. The investigation is anticipated to end in spring 2014. The confirmed violations will have to be eliminated and Lithuanian consumers will pay a fair market price, not political price, for gas.

 

Ensuring economic competitiveness is one of the key long-term objectives of the European Union.

 

According to the President, implementation of the EU's Third Energy Package, construction of energy interconnections which will join still isolated EU regions, and diversification of energy supplies will contribute to ensuring competitive energy prices and transparency in the Eastern and Central European region. The EU single energy market is planned to be completed in 2014.

 

Dalia Grybauskaitė also stressed that it was crucial to ensure independence of competition supervisory authorities in the European Union, resisting attempts of some political forces to limit the scope of competences and activities of these authorities.

 

The President and the Commissioner also reviewed proposals to adopt an EU directive on damages claims for violation of competition rules. According to the President, the directive is yet another tool in the fight against Gazprom's abuse of monopoly position as it will have a deterrent effect. This would make infringements even more expensive for offenders by ensuring that not only fines but also compensations to consumers and businesses are paid. 

Press Service of the President
Last updated: 2013-10-03 12:00

  

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