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PGNiG and Gazprom confirm the application of a new pricing formula

Polish oil and gas company PGNiG and Gazprom confirmed the application of a new pricing formula, as set out in the arbitral award.

The parties also agreed that by 1 July, Gazprom would transfer approximately 1.5 billion US dollars into PGNiG’s account to refund the overpayments for gas supplied in 2014-2020. 

“What happened goes to show that the effective policy pursued by our government and the staunch fight we put up to defend Polish interests have borne fruit,” said Jacek Sasin, Deputy Prime Minister and Minister of State Assets. “It is evident that if a consistent policy supported by compelling arguments is in place, success can be achieved even with a partner as demanding as Gazprom. Thanks to such policy and our good cooperation with the President, we can achieve tangible benefits for Poland.”

The Deputy Prime Minister stressed that the relations between Poland and Gazprom look quite different from what they did only five years ago. Thanks to the consistent policy approach, they are now based primarily on a business partnership.

“We are making continued progress on our policy to diversify the sources of gas supply to Poland,” added Mr Sasin. “We maintain Poland’s energy security, ensuring the cheapest possible gas for Polish households and businesses.”

The new pricing formula, as set out in the arbitral award, is linked largely to gas prices quoted on Western European markets. As a result, since March this year, PGNiG has paid a lower price for gas imported into Poland from across its Eastern border. However, the new pricing terms set out in the award are effective as of November 2014, including the date on which PGNiG requested Gazprom to revise the pricing formula. The arbitral award allowed PGNiG to take steps to recover the amounts overpaid for gas supplied from 2014 to 2020 at prices determined based on the previous formula, which was challenged by the Stockholm tribunal.

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