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European Parliament calls for investigation against Gazprom due to gas prices, says source

A group of around 40 deputies of the European Parliament has submitted a letter to the European Commission (EC) urging it to investigate from the viewpoint of the EU’s antimonopoly norms Gazprom’s actions that allegedly pushed gas prices up to a record level in Europe, a source in the European Parliament told TASS on Friday. The European Commission confirmed that it had received the letter, but stated that it considers the record growth of gas prices in Europe a result of objective factors.

"A group of 40 European deputies from Poland and the Baltic states has turned to the European Commission with an official request to carry out an antimonopoly investigation against Gazprom for actions that could have led to the growth of gas prices in Europe," the source said.

In her turn, the European Commission’s spokesperson Arianna Podesta said on Friday: "I can confirm that we have received it and we will reply in due course. At this stage, I am afraid there is nothing more I can add to the letter point in itself."

Objective factors

On the same day, another representative of the European Commission Vivian Loonela said that the EC considers the growth of gas prices in Europe a result of a number of objective factors.

"The [European] Commission is very much aware and observing and monitoring the situation in the member-states when it comes to these hikes in the energy prices. We have seen different steps of that process over the past year during the pandemic. Electricity prices were at record lows, so from that point of view it was to be expected that there would be some kind of increase. But now, the high prices that have been observed are mainly the result of a combination of factors, largely driven by a significant increase in global gas demand to the economic recovery. There has been to a lesser extent an increase in the price of the CO2 quotas under the Emissions Trading System (ETS)," she explained. The growth of prices of ETS quotas encourages additional demand for gas, which is the most environmentally sound type of traditional fuel.

Among other objective factors pointed out both by European and Russian experts, which the EC preferred not to mention, was the continuous still in the North Sea, which led to a multi-fold decrease in electricity generation at offshore wind-driven generators, with gas used to compensate for those losses.

Moreover, prices were pushed up by the lack of opportunity to increase production in Europe, particularly in Norway, the Netherlands and Britain, as well as most of the LNG supplies, which were expected by European countries, moving in 2021 to Asia, where the economic recovery after the 2020 downturn triggered an extra demand for energy.

On Wednesday, the gas price on spot markets hit an all-time high, almost reaching $970 per 1,000 cubic meters at the peak. However, the price dropped to around $800 per 1,000 cubic meters by trading closing. On Thursday the losses extended as the price neared around $735 per 1,000 cubic meters.

[Source: Tass, Brussels, 17Sep21]

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