MOL: INA To Sell Natural Gas to Households at Regulated Price

BUDAPEST--Hungarian oil and gas company MOL Nyrt. (MOL.BU) said Friday that its Croatian unit INA d.d. (INA.ZG) will be required to sell natural gas to households at a price regulated by the Croatian government, resulting in a 10.2 billion forint to 14.2 billion forint ($44.9 million to $62.5 million) loss in revenue annually.

MAIN FACTS:

- Under a set of resolutions Feb. 27, related to INA's obligation to deliver the gas produced in Croatia under a regulated price as put forward by the economy ministry, INA will sell the portion of its natural gas production for household supplies to state-owned company HEP as the wholesale market supplier. The decision also makes it obligatory for the distributors to purchase gas from HEP.

- So far INA--through Prirodni plin--received HRK2.2000 per cubic meter for sales in the household segment while now INA shall receive HRK1.7058 per cubic meter for the respective volumes. Parallel, the regulated sales price of HEP towards distributors to household customers will be HRK2.4032 per cubic meter.

- According to the new regulation--on a like-for-like basis and taking into account adjustments in cost items--INA will have to transfer, depending on the natural gas quantities, HRK250 million to HRK350 million, or HUF10.2 billion to HUF14.2 billion ($44.9 million to $62.5 million), annually from its own revenues to HEP.

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