Energy 3 June, 2019 10:00 am   

Sakławski: Price diktat on the energy market in Poland?

The chairman of the Energy Regulatory Office sent a notice to the prosecutor’s office concerning possible manipulations of energy prices on the Polish Power Exchange in the second half of 2018. In an interview with, Jan Sakławski, attorney-at-law, associate at Law Firm Brysiewicz and Partners states that current capital structure of the energy market brings forth the risk of a price diktat, which will not be removed by the submitted notice. 

He stressed that the chairman of Energy Regulatory Office as a public authority appointed under the REMIT decree is obliged to notify the relevant services if he recognize the risk of manipulation. – I think that this is an action that is supposed to show the problem rather than solve it. The problem eventuates mainly from the capital structure of the market.

– In my opinion, situation in which we have oligopoly, not only in matters of turnover, but also in the productive area, connected additionally by a common ownership factor, contains immanent risk of shaping market situation by this structure. If four entities are controlled by the same owner, then in some range their policy will be joint because of the ownership decisions. At the same time, at the ownership level it is difficult to detect it because ownership policy has its own powers. However, concentration in one hand of 80 percent of the market causes undesirable situation. If we had in the building materials market four or five suppliers controlling its 80 percent, then naturally they would dictate prices. Did it come to a crime? The prosecutor and the court will tell it us, while it will not change the market structure due to a certain economic calculation and the policy of the State Treasury. In my view this should not be his target architecture – he ascertained.

As he stressed that the market should function on the basis of competition and prevent domination. – In the case of the energy market, we are talking about a natural oligopoly because these entities came into existence as a result of division of old energy plants. This is a phenomenon known in economics and law science. In spite of everything, it is not a desirable state. This is a price dictate – thinks interlocutor of

He noticed that one of reasons for the increase in energy prices is the structure of energy mix, which is almost 80 percent based on coal. – As long as mix will not be corrected, we will not escape from the problem of energy prices increase – said Sakławski.