The government said on Wednesday that if Lithuania won its arbitration dispute with Gazprom at the Stockholm arbitration court, then around 1.4 billion euros to be paid as compensation by the Russian gas giant would go to consumers.
Gazprom
© Reuters/Scanpix

The government did not, however, give details as to how the money would reach them.

Prime Minister Algirdas Butkevičius said that the decision was made to prevent possible speculations on this issue.

"We took the decision because our lawyers said that someone - the other side - might speculate about the money not being used in Lithuania for its intended purpose. Our decision is that the money, if it is awarded to Lithuania, will go to Lithuanian consumers. The procedure for the distribution of the money will be worked out later," Butkevičius told reporters after the Cabinet's meeting.

"I have a certain proposal, but I cannot say what until it is approved," he said when asked about the procedure.

The Cabinet of Wednesday adopted a protocol decision and instructed the Energy Ministry to put up proposals as to the best way to distribute the money to consumers and draft the respective legislation.

It is likely that the money would be transferred to the state budget, but it is not clear if it would be only paid to gas consumers or to other consumers as well. However, it is not ruled out that the funds would go toward gas infrastructure projects of public importance.

The Stockholm arbitration court is scheduled to hear the Lithuanian government's suit against Gazprom next summer and to issue its ruling in the fall. Lithuania last November submitted a reply to Gazprom's response. The defendant this spring is to file a rejoinder.

The government is seeking compensation from Gazprom for overcharging Lithuanian consumers for gas supplies between 2004 and 2012.

The suit was initiated in 2012 after Gazprom allegedly violated an agreement on the privatization of Lietuvos Dujos (Lithuanian Gas) in which the Russian company committed itself to supplying gas to Lithuania at fair prices.

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