(94 EUR, 0,34%) Transgas, the dominant Czech natural gas distributor will raise to raise prices by average 7.8% as of January 2008, while the price for Hungarian households will rise by 5% according to the Economy Ministry of the country.
The fact that other CEE countries increase the wholesale and retail price of natural gas make it politically more acceptable for the new Polish government to do the same. Energy market regulator URE should decide on PGNiG's claim to increase prices by 5-9% until 15 December. Last week, Polish press speculated that URE might not approve PGNiG's claim due to the sharp weakening of the US$ against PLN. Although CZK and HUF also strengthened against the US$ substantially, we believe that these countries made a step forward expecting the import natural gas prices rising substantially in 1Q08 and 2Q08 on the back of the recent jump in crude oil and heating oil prices. Based on the decision of and Hungary we became more optimistic on the potential price increase in Poland and foresee market sentiment improving further on (5 PLN, 0,18%).