NMa: Dutch gas trading company GasTerra did not charge excessive prices for natural gas

Dutch gas trading company GasTerra did not charge excessive prices for natural gas. The Netherlands Competition Authority (NMa) comes to that conclusion, based on an independent study into natural-gas price levels in the Dutch wholesale market. The NMa does conclude, however, that price levels in 2007 on the wholesale market for small-scale end-users served through retailers have been relatively high. It will therefore continue to keep a close eye on price developments on the Dutch wholesale market. The NMa will examine price developments for the years 2008 and 2009, and expects to publish its findings in the first half of 2010.

Several complaints, tip-offs and indications that the NMa had been receiving for the last two years were the reasons for the study. Commissioned by the NMa, research firm Frontier Economics conducted two different types of studies in order to determine whether the tariffs that GasTerra charged its customers had been excessively high. In those studies, Frontier Economics used a model based on a hypothetical gas market in which GasTerra faced more competition from other natural-gas suppliers. Based on the outcomes of the model, it can be concluded that, on average for the various analyzed years, GasTerra's actual wholesale tariffs for large-scale end-users were in line with estimated tariffs in a hypothetical, competitive market. Wholesale tariffs for small-scale end-users have, on average for the analyzed years, also been in line with estimated tariffs, with the exception of 2007, in which they have been considerably higher. The NMa has therefore come to the conclusion that, ultimately, GasTerra's tariffs have not been excessive, but it will keep a close watch on price developments.


No legal link between oil prices and natural-gas prices
One of the reasons for natural-gas prices being high is their partial link to oil prices, according to several complainants, who say energy companies are much more likely to adjust natural-gas prices after increases in oil prices rather than after decreases. Decisions by the NMa are based on the Dutch Competition Act, and the NMa will therefore not investigate whether there is a de facto link, but rather whether natural-gas prices have been excessive in the past. Linking natural-gas prices to oil prices, partially or not, is up to GasTerra, and there is no legal obligation to do so.