VILNIUS - Prime Minister Algirdas Brazauskas stood his ground last week during meetings with Lietuvos Dujos' (Lithuanian Gas') shareholders, defending a regulators' decision to approve a lower-than-asked-for price hike.
"Natural gas and electricity prices are regulated. We have laws on natural gas and electrical energy that provide for regulation of prices for consumers who are not free," to choose suppliers, the prime minister said on June 2.
"We are all interested that prices do not rise. People's purchasing power, particularly those who use gas at home, is not high. So we cannot leave this process uncontrolled," he said.
The comments were in response to criticism from the CEO of Germany's E.ON Ruhrgas, a shareholder of Lithuanian Gas, who expressed his dissatisfaction over the recent decision to establish a lower natural gas prices than sought by the gas utility.
"We are concerned over the recent decisions and fear that they will have a negative impact on the company's development. We hope that a solution will be found," E.ON Ruhrgas President Burckhard Bergmann said after meeting Brazauskas.
The German company owns 38.9 percent of Lithuanian Gas, while Russia's Gazprom holds a 37.1 percent stake. The Lithuanian government holds a 17.7 percent stake.
Gazprom, for its part, did not voice similar dissatisfaction, which could in part be explained by the company's interest in acquiring control over the Mazeikiu Nafta refinery (see story on Page 6). But CEO Aleksei Miller, who also met Brazauskas last week, did not rule out a price increase for Lithuania.
"We are primarily interested in growth of natural gas consumption in Lithuania, where we see a potential because of the growing industry," he said after meeting with President Valdas Adamkus on June 2.
"Gas prices for manufacturers must grow, and at the same time remain competitive compared with heavy fuel oil and coal prices," he said.
Miller pointed out that gas prices are lower in Lithuania and the other Baltic states than in most other European countries. But he added that Gazprom appreciates its partner relations with consumers in Lithuania.
For his part, Brazauskas said that Gazprom was unlikely to increase natural gas prices for Lithuania. "My impression is that the price should not change considerably. I think we can keep the price at a similar level 's it is similar in all three Baltic states 's unless some reasons emerge," he said. "For now I do not see any necessity or any visible reasons for the prices to change."
The National Control Commission for Prices and Energy recently established lower natural gas prices for Lithuanian Gas' industrial consumers. The company responded by saying that the decision would adversely affect its financial results.
Last week the company took the energy regulator to court over its earlier decision to set price caps on natural gas. The caps are for a three-year period beginning July 1, 2005, and are on average 6.4 percent lower than those currently in place.
Lithuanian Gas posted a net profit of 33.6 million litas (9.7 million euros) for the first quarter of this year, down 1.2 percent from a year earlier. Revenues rose 50 percent year-on-year to 216.9 million litas.
