PGNiG Hit with €14.4 Million Fine

Poland's biggest gas company PGNiG has been hit with a 60 million zloty (approx. €14.4 million) fine by the Office of Competition and Consumer Protection (UOKiK) on the basis of illegal market practices.

PGNiG, which supplies 98 per cent of Poland's gas market sales, is accused of denying fair competition in the market. The UOKiK, Poland's competition authority, said the company had abused its position as the dominant market leader in Poland by refusing to allow a smaller company, NowyGaz access to PGNiG's gas supplies. The authority said that because of PGNiG's restriction of competition in the market and because it was denying Polish consumers the opportunity to choose their gas supplier,  it was imposing the massive fine. 

The proceedings began in December 2010 after PGNiG refused to sign an agreement with Nowygas for supply of gas from PGNiG to the smaller company.

"Refusal to sign the contract [for sales with NowyGaz] was to reduce or at least delay the development of competition in the retail sale of natural gas, by preventing the provision of services by NowyGaz, and indirectly influencing the behavior of other parties potentially interested in taking up activities in this field," a statement from the UOKiK said yesterday.

"The effects of the illegal practices were felt by the final gas customers, including consumers who thought the laws should guarantee free choice of gas retailers. Meanwhile, they could only buy gas from PGNiG. Market presence of other gas suppliers could result in price cuts and better quality services."

The decision is not final and PGNiG will have the opportunity to appeal, an opportunity it says it will be taking.

PGNiG spokeswoman Joanna Zakrzewska said in a short company statement yesterday that PGNiG would be appealing the decision.