Industry’s reaction to gas cost hike most likely cause of bill delay

A delay in the submission to Parliament of an Environment, Energy & Climate Change Ministry draft bill for the gas market’s liberalization has sparked much speculation about the cause of the slow progress made, the most likely reason being industry’s reaction to a planned increase in gas distribution costs.

EVIKEN, the Association of Industrial Energy Consumers, made clear its objections to the increase from the moment public consultation procedures were launched. Public consultation procedures ended on October 29.

The increased distribution cost for gas has been proposed as part of the compensation package for the planned end of regional monopolies enjoyed by DEPA, the Public Gas Corporation, and the country’s gas distribution companies (EPA) currently operating in the wider Athens area, Thessaloniki, and Thessalia, in the country’s mid-northeast. However, the hike would increase the already-elevated cost of gas for large-scale industrial companies.

SEV, the Hellenic Association of Industrialists, has also stepped in to demand a change to the planned cost increase.

The gas market reforms bill is one of nineteen conditions set by the country’s creditor representatives, or troika, if Greece is to qualify for a strengthened credit line.

The planned distribution cost increase, from one euro per MWh to four euros per MWh, would lead to an eight percent increase in the cost of gas. For the time being, it will only affect Greece’s heavy industry, already burdened by relatively high gas costs compared to lower rates enjoyed by competitors in other countries. Household consumers will not be affected until a latter date, January 1, 2018, when they will be free to choose suppliers.

EVIKEN contends that the distribution hike will wipe out any gains made by a Gazprom gas price discount offered to the country following intervention from Prime Minister Antonis Samaras.