Crucial measures needed for competition in gas market

The gas market reforms being implemented have prompted a number of objections by consumers lately, the main concern being the distribution cost, which is considered hefty. Despite some concerns about the reforms, industrial consumers support the effort being made to open up the gas market to competition. It remains to be seen how new entrants in the gas supply market will view the reforms and whether these will offer opportunities for heighetened competition or instead maintain existing regional monopolies.

Certain misjudgements may have been made in determining new distribution cost levels, which include compensation amounts for the country’s three exisiting EPA supply companies in the wider Athens area, Thessaloniki, and Thessalia, whose regional monopolies have been cut short as part of the reforms. However, this represents part of the process aiming to open up the country’s gas markets.

Pending issues still need to be resolved to clear the way for new players in the gas market. Market authorities believe a detailed and objective study determining appropriate distribution cost levels needs to be conducted by an independent body, based on real market conditions and costs involved.

The exisiting EPA companies and new arrivals will need to purchase from suppliers of their choice in order to generate competition and drive prices down, authorities believe.

Also, DEPA, the Public Gas Corporation, will need to be subjected to market share restricting measures, over a reasonable period of time, along the lines of conditions imposed on main power utility PPC in the latest bailout agreement. In the electricity market, no suppliers will be permitted to hold more than a 50 percent share of the market by 2020.

If these measures are implemented, the resulting market conditions will generate real competition by drawing new players into the market, which, ultimately, will benefit consumers, officials believe.