Rzeczpospolita reports that a number of European countries, including Poland, face the possibility of paying record prices for natural gas purchased from Russia.

Russian gas producer Gazprom, which supplies much of Europe's natural gas, has indicated that the price could stand at $500 per 1,000 cubic meters, 50 percent more than in January 2011.

The potential for a significant price hike results from long-term contract rates which are linked to current oil prices.

Gas importers including Poland's state monpoly PGNiG have sought to renegotiate contracts with Gazprom. Germany's RWE AG recently stated that the company has initiated arbitration procedures for most of its natural gas supply deals with producers, as negotiations to adjust commercial terms have failed.

Anticipating higher costs, PGNiG, has applied to Poland's Energy Regulatory Office for a undisclosed tariff increase.

Read the Full Article from Rzeczpospolita HERE (in Polish)