PPD: There Was No Attempt at Manipulation, We Will Appeal the Decision of the Hungarian Regulator

First Gas Company (PPD) announced on Friday that the decision of the Hungarian regulator imposing a €1.35 million fine does not imply that there was an intention or attempt at manipulation by PPD, and they announced that they will appeal this fine, which they consider unusually high.

– The decision of the Hungarian regulator (MEKH) punishing PPD states that there was no attempt to manipulate the market and that there was no manipulation that would have been carried out by spreading information, deception, or concealment, but that PPD violated the EU regulation (REMIT) because a manipulation effect occurred, i.e. specifically – although there was no intention to manipulate, the very competition of PPD at the auction raised the price of gas transportation – it was emphasized in PPD’s response to Hina’s inquiry.

Namely, PPD is accused of participating in the auction for leasing gas transportation capacities for gas that was to be transported from Austria to Hungary at the border crossing Mosonmagyaróvár from January 17 to 26, 2022, without a real intention to transport that gas, but with the intention of raising the price of gas transportation at that crossing during the auction.

PPD explains that, just as gas is traded on exchanges, similar auctions for gas transportation are held daily, which is paid in each country through which the gas passes on its way to the destination. Suppliers compete at auctions for transportation capacities by offering a certain price for transportation in order to deliver the contracted gas to their customers, they state.

During the disputed auction, the price of gas transportation rose to unacceptable levels for PPD, and PPD found an alternative cheaper transportation route from Slovakia and withdrew from the auction. PPD then transported the same amount of gas for which it was bidding at the auction, but via an alternative, cheaper route, they explain.

– PPD’s position is that there is no question of manipulating the market but rather of choosing the cheapest option in the spirit of legal market competition. Such optimization is carried out daily by PPD, as well as other participants in the common European market, transporting gas between European countries, with the aim of minimizing costs and commercial optimization – they stated.

They also announced that they will appeal the decision of the Hungarian regulator from June 7 of this year and will appeal, and until then pay the fine of €1.35 million that has been imposed.

– According to our information, this is an unusually high fine for such a type of violation – assessed PPD, noting that PPD generates 70 percent of its revenue in foreign markets and that, regardless of such treatment, will continue to expand its business in the Hungarian market, respecting all the rules of the common European energy market, just as Hungarian companies operate in the Croatian market.