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Lithuania to regulate gas prices despite Gazprom deal

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VILNIUS, March 20 (RIA Novosti) - Parliamentarians in Lithuania passed long-debated amendments to a gas law Tuesday enabling the government to regulate gas prices regardless of a deal with the Russian natural gas monopoly.

The government and some legislators of the new European Union member have opposed the motion, saying it went against a 2003 agreement with Russia's Gazprom [RTS: GAZP] providing for gas price liberalization.

"On the one hand, we want to restrict the profit of one single gas company. On the other, we have a long-term deal with Gazprom," Prime Minister Gediminas Kirkilas said after the bill was passed by a majority of 71 attending lawmakers out of the 141-seat legislature.

Lithuania presently consumes 3 billion cubic meters of gas a year at a price of $202 per 1,000 cu m, which is 25-30% less than the price for western Europe.

"We pay lower prices than Europe on average, and this is only thanks to the deal with Gazprom," Kirkilas said.

Kirkilas and former President Algirdas Brazauskas had strongly opposed the amendments for fear they could lead to serious price hikes. The bill was debated for two years.

Under the 2003 deal with the Lithuanian government, Gazprom bought 34% in Lithuania's gas pipeline grid company Lietuvos dujos.

In the document, Gazprom set a condition of no gas price restrictions for "free" consumers, including companies buying gas directly from Gazprom or through its subsidiary Dujotekana rather than Lietuvos dujos.

The provision has been vehemently criticized by legislators, who do not approve of Dujotekana's soaring super-profits.

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