The gas market regulator URE decided to leave domestic gas tariffs unchanged until September 30, the end of third quarter. The decision is in line with PGNiG´s own proposal.
Our view: After the 9.9% gas price increase on January 1, many suspected URE to cut tariffs for 2Q07 on the expectation that falling crude price in January combined with a strong zloty can lower gas import costs. With URE´s recent decision there is a chance that current 30% gap between international prices and Polish domestic tariffs would squeeze in 2Q07 and 3Q07. We foresee slight positive market reaction to the news.