VKG loses oil shale price dispute in court

Oil shale being processed by VKG.
Oil shale being processed by VKG. Source: (Postimees/Scanpix)

Northeastern Estonia-based shale oil producer Viru Keemia Grupp (VKG) lost in court in an oil shale dispute against state-owned energy group Eesti Energia and the Estonian Competition Authority.

Tallinn Administrative Court on Tuesday decided not to satisfy a claim filed by VKG AS and VKG Oil AS regarding the termination of a supervision proceeding. The Estonian Competition Authority found that the price charged by Eesti Energia to VKG for oil shale in 2013-2015 was in accordance with the Competition Act, the competition watchdog said.

The court determined that the Estonian Competition Authority's final conclusions regarding terminating the proceeding were lawful.

Oil shale is used primarily to produce electricity and shale oil. Eesti Energia and VKG are two of the biggest consumers of oil shale in Estonia. Eesti Energia Group has held the right to extract approximately 75 percent of oil shale, therefore it is easily the biggest oil shale extractor in Estonia.

VKG, meanwhile, is permitted to extract smaller volumes and at times can run short as a result. In such cases, VKG has historically purchased the needed oil shale from Eesti Energia.

VKG found that the price of the oil shale discriminated against the company. The Estonian Competition Authority, however, found that the prices were reasonably connected to the high electricity prices on international markets at the time and Eesti Energia's actions did not negatively affect competition.

Editor: Aili Vahtla

Source: BNS

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