Lithuania Court Rules Gazprom Must Pay Fine

Russian gas monopoly Gazprom must pay Lithuania a fine of €35.65mn ($37.28mn), which was imposed two years ago for refusing to sign a gas exchange deal with Lithuania‘s state-owned electricity production group Lietuvos Energijos Gamyba (Lithuanian Energy Production, LEG) formerly known as Lietuvos Energija, Lithuania‘s Supreme Administrative Court has ruled.

The court upheld the fine imposed by Lithuania‘s competition council, the antitrust watchdog, in 2014. The sum of fine marks the highest financial penalty in the Baltic country‘s history.

In mid-2014, the anti-trust agency found that Gazprom‘s reluctance to negotiate with Lietuvos Energijos Gamyba on a natural gas swap deal in 2013-2015 prevented the Lithuanian company from purchasing cheaper gas from another supplier and thus had breached a condition of a 2004 agreement on the acquisition and sale of shares in Lietuvos Dujos (Lithuanian Gas) .

It then said that LEG deal with a western European company would allow lower gas purchasing costs and hence lower electricity prices for consumers.

Gazprom argued in court that the monopoly watchdog had misinterpreted a clause in the 2004 sanction for it to purchase a stake in Lietuvos Dujos and consequently started the probe and imposed the fine without a reason.

Linas Jegelevicius