Lithuania seeks EU probe of Gazprom market 'abuse'

(VILNIUS) - European Union member Lithuania said on Tuesday that it had asked Brussels to probe Russian gas giant Gazprom for abusing its market clout, saying such muscle-flexing must end.

"The Ministry of Energy of the Republic of Lithuania launched a complaint with the European Commission, requesting it investigate the abuse of a dominant position by the Russian gas supplier Gazprom," a government statement said.

It said the goal was to "ensure that terms and conditions for supply of natural gas to Lithuania were determined solely by economic considerations."

To do so, it said, the commission should order Gazprom to apply "transparent, reasonable and non-discriminatory conditions."

The Brussels-based commission is the executive body of the 27-nation EU and polices its trade and competition rules.

Gazprom responded Tuesday by terming Lithuania's allegations "simply incorrect" insisting that it "conducts its business in the Lithuanian market in strict accordance with the accepted business norms and the laws."

The giant company said in a statement issued in Moscow that it had "not received any notice from the Lithuanian authorities in respect to breaching the pricing conditions of Russian gas supplies."

"Huge fines, in the millions, were imposed on companies like Intel or Microsoft for using a monopolistic situation for their benefit and for breaching consumer interests," Lithuanian Energy Minister Arvydas Sekmokas told reporters Tuesday.

"Gazprom is no exception. But it's the commission's prerogative to decide what measures have to be used. Our goal isn't to punish Gazprom, our goal is to ensure the security of supply and energy independence," he said.

Lithuania and Gazprom are battling over Vilnius's drive to respect EU energy market reform rules by "unbundling" the country's gas system, separating bulk supply from that piped to consumers.

Currently Gazprom is Lithuania's sole supplier and also has a 37.1 percent share in its gas distributor Lietuvos Dujos.

Gazprom and another major Lietuvos Dujos stakeholder -- E.ON Ruhrgas International from EU member Germany -- have pressed Lithuania to ask Brussels for an exemption from gas market reform rules but Vilnius has refused.

Sekmokas said the government would table a reform law at parliament's next session in March.

Gazprom has reportedly said it would deny Lithuania gas discounts offered to neighbouring nations.

Lithuania, a nation of 3.2 million, joined the EU in 2004.

It is seeking to cut its dependence on gas supplies from Russia, a legacy of its five decades as a Soviet republic before the communist bloc collapsed in 1991.