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Unbundling to benefit consumers

  • 2010-12-02
  • From wire reports

VILNIUS - Lithuania’s Prime Minister Andrius Kubilius believes that the draft natural gas law approved by the government would lead to a reduction in natural gas prices paid by consumers, reports ELTA. According to the draft, Lithuania is committed to complying with the directive on unbundling ownership, as provided for in European Union (EU) law, and to split the gas sales and transmission ownership.

After the government’s meeting on Nov. 29, Kubilius said that, despite the resistance from Lietuvos Dujos, the implementation of EU directives in the gas sector would be beneficial to consumers in Lithuania, who currently pay about 100 U.S. dollars more per thousand cubic meters of natural gas than German consumers for the same gas.
“I want to remind you that Lithuania is a member of the EU and because of that it must comply with European law and commitments. I do not want to comment on the statement of the neighboring country’s prime minister at the end of last week, which should be addressed to the European Union rather than to us,” said Kubilius.

“Well, how should I call it?” the Russian Prime Minister Vladimir Putin said, expressing his outrage at a meeting with German businessmen in a business forum in Germany last week. Putin severely criticized Lithuania’s plans to “take away” gas main pipelines from the distributor Lietuvos Dujos, in which Russia’s Gazprom holds a stake, and called them “robbery.” Putin recalled that Gazprom “acquired a share of the company’s assets in the country legitimately,” and now “the company is being thrown out from there.”

In August, Gazprom started to threaten Lithuania with international arbitration for the government’s plans to reform the energy sector. Due to the reform, Gazprom may lose some of its property. In response to these threats, Lithuania stated that “the big companies have exerted pressure on a small country.”
Energy Minister Arvydas Sekmokas noted that the exemption of the EU’s ownership unbundling directive, enjoyed by Latvia, Estonia and Finland, was not applied to Lithuania because the Seimas of the previous term of office had decided not to apply for it.

“Those letters, which we have received from the two shareholders, create unnecessary pressure. (...) As a company, Lietuvos Dujos has to be equally loyal to all its shareholders - both Gazprom and the government. Lietuvos Dujos takes a wrong position by assessing the behavior of politicians and interpreting [it as] politicking. Lietuvos Dujos should engage only in economic activity and refrain from commenting on policies,” stated Sekmokas.

On Nov. 24, the Energy Ministry received a letter from the European Commission, saying that the exemption laid down in Article 49 of the directive’s 3rd package, could not be applied to Lithuania. It had earlier caused the discontent of Lietuvos Dujos’ shareholders - the Russian gas concern Gazprom and Germany’s E. ON Ruhrgas International.