(businessweek) -- Polskie Gornictwo Naftowe i Gazownictwo SA (PGN), Poland's biggest natural-gas distributor, got a regulatory approval to increase prices, a move that will allow it to speed up investments and improve earnings.
Gornictwo, known as PGNiG, may boost prices for the largest industrial customers by an average 16 percent, Agnieszka Glosniewska, a spokeswoman for the Warsaw-based watchdog, said by phone today. The regulator also approved a 7.2 percent increase in the rates for households with lowest consumption.
The company, which buys about two-thirds of its annual 14.5 billion cubic meters of gas from Russia's OAO Gazprom, is losing money on sales of the fuel as the price it charges its customers doesn't cover the cost of imports. The purchase price is in dollars and based on nine-month average prices of oil-related products, while PGNiG sells gas at a rate set by the regulator.
⌠The new tariff will allow the company to implement its very ambitious investment plan, which is focused on gas search and exploration on the domestic market, Joanna Zakrzewska, a PGNiG spokeswoman, wrote in an e-mailed statement today.
New prices will be introduced from March 31 and will be in effect until the end of 2012. Last year, the state-controlled company sold 75 percent of gas to industrial clients, including PKN Orlen SA, the country's largest refiner, as well as chemical producers Zaklady Azotowe Pulawy SA (ZAP) and Azoty Tarnow.