Polish Oil and Gas fails to negotiate Russian gas prices

Polish Oil and Gas (PGNiG) did not manage a successful end to Tuesday's price negotiations with Gazprom for natural gas imported from Russia, and thus on the basis of previous agreements Poland will pay 30% more for gas purchased since Oct. 1.Yet since PGNiG pays Russia for gas with a three month delay, the effect of the 30% hike will not be borne by customers until the beginning of 2001. And even then, according to PGNiG president Andrzej Lipko, the average customer's bill will reflect only 50% of the price increase, so with the 30% increase customers will pay only 15% more. PGNiG cannot change the prices set by Energy Regulation Office (URE) until March 2001, since it has already increased prices by 12.5% this year, the maximum allowed. If the URE decision remains unchanged, prices would jump by 22.5% next year.