EU and Gazprom at loggerheads over gas stranglehold

Russia’s foreign minister called the charges by the EU “absolutely unacceptable” a day after Gazprom gas giant was accused of hindering competition in Central and European markets.

On Wednesday European Union competition regulators have opened a case against Russia’s state-controlled Gazprom, with the European Commission (EC) saying the gas company was abusing its dominant market position.

But today Russia Foreign Minister Sergei Lavrov said the EU was trying to retroactively apply new rules to old contracts in a televised address.

“That is absolutely unacceptable, at least because we have had the Partnership and Cooperation agreement with the EU from 1999 which no-one cancelled, and it is written there that the parties shall not take actions that will lead to the deterioration of business conditions,” Lavrov said.

EU Competition Commissioner Margrethe Vestager said she was investigating Gazprom’s sales policies throughout most of the EU’s eastern borders, from Estonia to Bulgaria. The complaints include preventing cross-border flows of gas to other EU countries, charging unfairly high prices and demanding to keep control of the pipelines in return for gas.

“Gazprom strictly adheres to all the norms of international law and national legislation in the countries where the Gazprom Group conducts business,” the company said in a statement.

The gas company now has 12 weeks to respond to the allegations and EC’s move could further alienate the relations with Moscow, which are already tense over the Ukraine crisis and Russia dropping the South Stream pipeline.

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