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Išbandyti
2012 10 04

Prime Minister: Lithuania is not afraid of Russian retaliation for claim against Gazprom

Prime Minister Andrius Kubilius says that he does not expect political revenge from Russia due to Lithuania's claim against Gazprom over allegedly unfair prices for natural gas supplies during the past eight years, adding that Lithuania is not afraid of threats and pressure.
„Gazprom“
„Gazprom“ / „RIA Novosti“/„Scanpix“
Temos: 1 Andrius Kubilius

"I hope that both the Russian leadership and Gazprom understand that the possibility to take disputes over gas prices to arbitration, which is provided for in the contracts, is part of normal business practice. We won't be frightened by any intimidation or pressure," he told the Žinių Radijas radio station.

Kubilius said that the claim of around 5 billion litas (EUR 1.45b), is not part of the election campaign. "In this case, we are doing what - we are certain about that - we have to do after the elections as well," he said.

The leader of the outgoing Conservative and Liberal coalition government said that the filing of the claim is in line with the government's consistent position and follows a certain sequence of events, including the European Commission's decision to launch a probe into Gazprom' activities, as well as retroactive cuts in the Russian supplier's gas prices obtained by Germany's E.ON and other European companies.

"We should then think that the European Commission's decision is also part of our election campaign, which would be completely absurd," he said.

Some sources say that the government decided to take the legal move against Gazprom before the 14 October general elections for fear that the documents and evidence it has collected would later "disappear in the drawers." They say that the materials of the case have been collected "very carefully" and that lawyers hired by the Energy Ministry see the case as having "prospects of success."

On Wednesday, Lithuania initiated an arbitration procedure against Gazprom at the Stockholm arbitration tribunal, demanding up to 5 billion litas in compensation for what it says to have overpaid for Russian natural gas in 2005 through 2012 due to unfair pricing.

The Energy Ministry says that Gazprom's gas price to Lithuania surged in the period between 2005 to 2012 as a result of certain changes in the gas price formula made in breach of the 2002 deal on the sale of a state-owned stake in Lietuvos Dujos (Lithuanian Gas) to the Russian giant.

It is said that the gas price formula has been revised five times since 2005, eventually tying it to soaring oil product prices in the world's markets. Lithuania now wants the gas price to be linked to biofuel prices.

The European Commission is carrying out an investigation into Gazprom's operations in Central and Eastern Europe. Among other things, it suspects that the supplier could have imposed unfair prices on its customers by linking the cost of gas to oil prices. The Lithuanian government has filed a complaint to the EU's executive body over possible unfair pricing and abuse of market dominance by Gazprom.

Lithuania, which currently pays the highest price for Gazprom's natural gas in the EU, thinks that the Russian supplier applies discriminatory prices to the country, which is the first Baltic state that is implementing the EU's third energy package and aims to unbundle the assets of Lietuvos Dujos.

Lithuanian Energy Minister Arvydas Sekmokas says that Gazprom's gas price to Lithuania has increased six-fold, to 497 US dollars per 1,000 cubic meters of gas in 2012, from 84 dollars in 2004.

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