What’s a Russian State-Owned Gas Bully to Do?

Gazprom has been given six more weeks to formulate its response to anti-trust charges filed by the European Union back in April. Brussels alleged that the Russian gas firm had unfairly pushed out competitors by linking contracts to pipeline projects, and had been price-gouging European customers with long-term take-or-pay contracts tied to the price of oil.

The European Commission’s investigation, apparently four years in the making (though the timing of the charges, coming as Russia’s relationship with Europe is so strained, certainly raises questions), also took issue with Gazprom overcharging certain customers like Lithuania, Bulgaria, Estonia, and the Czech Republic, all of whom rely on Russia for more than four-fifths of their gas supplies, and all of whom pay well above Europe’s average price.

These are serious allegations with potentially huge ramifications for the way Gazprom does business in its biggest market, so it’s not surprising to see the company taking its time to formulate a response. The WSJ reports:

“Gazprom is currently going through the extensive case file, analyzing it thoroughly and preparing the appropriate reply,” the company said.

The European Commission, the EU’s antitrust watchdog, confirmed the extension. “Gazprom argued that it would need additional time, including to assess the issues raised and translate documents,” the commission said.

The Russian firm now has until mid-September to formulate its legal response. The stakes are high, with a potential fine upwards of $10 billion in the offing and the possibility of a new precedent that would seriously weaken Gazprom’s position at the negotiating table with its customers— and by extension undercut Russia’s leverage over Europe. We’ll be watching.

Features Icon
show comments
© The American Interest LLC 2005-2017 About Us Masthead Submissions Advertise Customer Service