Gazprom Export is trying to retroactively raise the gas prices to Poland’s PGNiG. This move will revise the supplied gas contract to the country since 2017. Gazprom Export did not disclose the ground for raising its cost, but it’s not unusual to retrospectively change the contract prices if there are market developments or the spot prices changed significantly. The two companies have been at a deadlocked dispute over pricing. The dispute later led to an international arbitration court with the ruling in March. The court ruled that Gazprom must pay PGNiG around $1.5 billion by July 1. If the retroactive price reaching an agreement, the Gazprom bill to PGNiG could reduce significantly.
The companies are discussing to revise the cost of gas dating back to 2017 and Gazprom Export trust there are enough grounds to increase the prices. The company also said that it was appealing the ruling of the international arbitration court.
Gazprom and PGNiG confirming to use a different pricing formula and signed an annex to their contract on June 15. The arbitration court also ruled that the formula in the long-term deal are subjected to change to consider natural gas market quotes. Most of the gas Gazprom produces are bought by PGNiG, then resells under a contract that has been dated back since 1996. Market rumour said the deals with PGNiG pays more than the average western European companies. PGNiG did not give statement whether a rise would be accepted, noting only that every three years the Yamal contract allows for price renegotiation. It also said by the companies, that the ruling by arbitration court could not prevent them from further renegotiating the contract’s prices.
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Published on June 17, 2020 11:45 PM (GMT+8)Last Updated on June 17, 2020 11:49 PM (GMT+8)
