Lithuania hopes on concessions during negotiations with Gazprom

Energy Trade

Lithuania hopes to receive concessions as it begins gas price negotiations with Russian energy monopoly Gazprom, the Baltic country’s only gas provider, it was reported Tuesday.

“We may conclude that Gazprom is sticking to certain rules and may apply some concessions to certain countries,” Lithuanian Economy Minister Vytas Navickas said in an interview with the Verslo Zinios business daily published on Tuesday. “We should try to make use of that chance. I think that we should notify Gazprom about Lithuania’s problems, be more active during talks.” An EU member, Lithuania currently pays $190 per 1,000 cubic meters - well below the price paid by Western European countries. Last week, Prime Minister Gediminas Kirkilas said the Baltic state may see a rise up to $312-320 per 1,000 cubic meters. His estimates were unofficial as the country has only begun negotiations with Gazprom.

An approximate 60% surge in gas prices would rock the national economy since the rise in gas prices will result in higher prices of electricity and thermal energy, Navickas told the newspaper. Such a gas price hike could push heating prices 30%, Rimantas Germanas, director of commerce at Vilnius Energy told the newspaper. Jonas Sirvydis, CEO of Achema, a fertilizer producer, believes that the price will not reach more than $300 per 1,000 cubic meters. “I think that the increase will be less significant unless it is affected by some political decision,” Sirvydis told the business daily. “If the price of gas exceeds $300, we will no longer be able to work,” he said. “The production will no longer be cost- efficient. We cannot raise the prices of our products and risk our fertilizers losing the competitive battle, which has been quite harsh lately.” (m&c.com)

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