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The Collapse of Polish Energy Companies

Are we seeing the Collapse of Polish Energy Companies? As per Petr Wozniak, former president of Poland’s national petroleum & energy business PGNIG, rising costs for fossil fuels may force comparatively smaller companies across the country towards bankruptcy.

PGNIG is Poland’s biggest oil producer.

According to Wozniak, the situation is rooted in the fact that energy suppliers purchase gas mostly on the European spot market, which is a place where prices have been steadily climbing for the past several months.

“As a result, the rates that businesses will be forced to pay also on the spot market in order to purchase gasoline will continue to rise… There’s a significant risk that businesses will lack the financial resources necessary to make the required collateral payments. Then, a corporation in this position will be compelled to withdraw from the competition… If it does not have access to any gas stations, then it cannot sell fuel to end users. During an interview with the radio station RMF FM, Wozniak issued a warning that individual businesses run the risk of failing and said that “around the end of the calendar year, people can see quite substantial rising prices.”

After PGNiG declined to pay rubles for Russian energy supplies, it was stated that the company is now aggressively borrowing money in order to purchase on the spot market. In the course of the last 2 months, the corporation has finalized five loan deals with a number of financial organizations, each of which is valued at multiple billion euros.

Poland’s energy

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