AMCU to check Naftogaz for abuses in selling gas on annual contracts

The Anti-Monopoly Committee of Ukraine (AMCU) is investigating the existence of different approaches to the formation of prices for natural gas by the Gas Supply Company Naftogaz Trading LLC for different natural gas suppliers retailing natural gas to household consumers. Such actions of the Gas Supply Company Naftogaz Trading LLC could lead to a restriction of the competitiveness of a certain category of economic entities, as reported by the press service of the AMCU.

From May 1, 2021, they introduced annual gas tariffs for Ukrainain household consumers. The precondition for this was the Resolution № 572 from April 7, 2021, of the National Energy and Utilities Regulation Commission (NEURC, according to which natural gas suppliers are obliged to approve the basic annual proposals for thei household customers for the period from May 1, 2021 until April 30, 2022.

At the end of April 2021, Naftogaz announced on its official website that it was ready to provide the opportunity to purchase gas to suppliers operating in the retail market for household comsumers to create their own annual tariff plan. It was also reported that the main provisions of Naftogaz's annual contract contain uniform standard conditions for all gas suppliers servicing household consumers with a fixed annual price.

At the same time, the AMCU received statements from natural gas suppliers, according to which the Naftogaz's contracts for the supply of natural gas contain discriminatory conditions.

According to the information released by the AMCU, the share of the Gas Supply Company Naftogaz Trading LLC in the market of wholesale sales of natural gas in 2020 and H1 of 2021 was over 35%, which indicated a presence of structural signs of monopoly (dominant) position in the market. In addition, due to the vertical integration of the Naftogaz Group, the Gas Supply Company Naftogaz Trading LLC has stable prime access to the national natural gas resource, compared to the limited access of other Ukrainian natural gas suppliers as competitors. This, in turn, indicated that the Gas Supply Company Naftogaz Trading LLC has market power in the natural gas market of Ukraine.

In connection with the above facts, the AMCU has initiated a case of violation of the law on protection of economic competition by Gas Supply Company Naftogaz Trading LLC Naftogaz Trading LLC in the form of abuse of monopoly position in the natural gas market of Ukraine.

20:05 / 18 January 2022

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