The Polish energy regulator URE's decision approving new gas price tariffs for the second and third quarters must be published by March 17, PGNiG's spokesman Tomasz Fill told reporters on Thursday. In late February PGNiG announced that it had applied to the URE to maintain current gas price tariffs until September 30, the end of the third quarter. The current tariff, approved in December 2006, which was estimated to raise the wholesale gas prices by 9.9%, expires on March 31, 2007.
Our view: The market was speculating already that URE will decrease the retail price of natural gas for PGNiG reflecting the drop in crude oil prices in December. Also the strong Polish Zloty gives the additional reason for URE to lower the tariffs. However, the Poland is still far from the EU standards for the liberalized energy market and by leaving the retail prices on their current level, the government has a possibility to step closer to these requirements. In case of lowered tariffs for 2Q07 we foresee a negative market reaction.