PGNiG Receives Approval for Lowering Gas Prices, Poland

The President of the Energy Regulatory Office (URE) has approved PGNiG SA’s proposal to lower gas fuel prices, as well as subscription fees for households. The reduction will affect all types of gas sold by PGNiG SA.

This is a reduction on an unprecedented scale. For the first time on record, both gas prices and subscription fees will be lowered. This will be possible thanks to a considerable reduction in the prices of gas imported under the Yamal Contract, as negotiated by the PGNiG Management Board, and restructuring efforts at the Company, which have allowed it to cut operating costs.

Due to lower prices and subscription fees, the average annual gas bills paid by households using gas to prepare meals (the W-1.1 tariff group) will decrease by more than PLN 38 (VAT inclusive), or 9.7%. Customers who use gas to prepare meals and heat water (the W-2.1 tariff group) will see their bills reduced by an average of PLN 154 (VAT inclusive), or 10.1%, a year. The annual gas bills paid by customers with a gas-fired heating system installed at home (the W-3.6 tariff group) will fall by an average of nearly PLN 580, or 10.6%. The proposed tariff reduction applies also to customers in the S and Z tariff groups, i.e. those who draw nitrogen-rich gas.

Following the introduction of the new tariff, gas prices paid by Polish consumers will be among the lowest in the European Union. A comparison of gas prices for households in all European countries clearly demonstrates that final charges paid under the new tariff by customers classified into the W-3.6 tariff group in Poland will be higher only from those paid in Romania, while final charges for customers in the W-1.1 and W-2.1 tariff groups will be higher only from those paid in Romania and Bulgaria.

The price of gaseous fuel for industrial customers will decrease by 3.3%, which, when compared with the prices quoted on western markets (NCG, GPL, TTF), renders our price competitive. Thanks to the new tariff, the price asked by PGNiG will be around EUR 0.5/MWh lower than the prices currently recorded on wholesale gas markets with respect to contracts providing for a flat supply profile and take-or-pay clauses covering 100% of contracted volumes.

Further, the amended tariff defines prices, charge rates and settlement rules to be applied to trade in gas at a virtual point, adjusted to new legal provisions (the national grid regulation) and the Transmission Grid Code of OGP Gaz-System S.A., taking full effect as of January 1st 2013.

According to the decision issued by the President of URE, the amended tariff for the supplies of gaseous fuel will remain in effect until September 30th 2013.

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LNG World News Staff, December 19, 2012