The Company submitted a tariff application to the President of the Energy Regulatory Office on October 25th 2011. The change in the tariff is justified by a significant increase of the USD/PLN exchange rate. The currently applicable tariff has not been changed since July 15th 2011 and was calculated at the then prevailing USD/PLN exchange rate of 2.70.

The new tariff will enable the Company to cover the cost of its ambitious investment programme, related primarily to the exploration for and production of natural gas in Poland. A key objective of the programme is to intensify exploration for unconventional gas (shale gas). A significant increase in domestic production of gas would contribute to the stabilisation and security of gas supplies to customers over the next years. In the future, it would also enable PGNiG to reduce prices for all customers.

The changes introduced in the new tariff are as low as possible. Following the introduction of the new tariff, the monthly bill of a household customer who uses natural gas to prepare meals (mainly customers of the W-1.1 tariff group ) will rise on average by PLN 1.81 (7.2%). The monthly bill of a customer using natural gas to prepare meals and heat water (i.e. primarily customers classified in the W-2.1 tariff group) will rise on average by PLN 8.81 (9.4%). A customer who uses natural gas for central heating purposes (i.e. primarily customers classified in the W-3.6 tariff group) will pay on average PLN 35.42 (10.6%) more per month.

When comparing the increase in natural gas prices with the changes in the prices of other energy carriers (e.g. fuel oil), it should be noted that, for retail customers, the increase is still lower than in the case of fuel oil prices, which grew by as much as 30% within the last few months.

The comparison of gas prices for households in Europe, including countries such as Germany, Spain, France, the Czech Republic and Slovakia, shows that, following the tariff change, final charges imposed on customers in Poland will remain the lowest in Europe, still lagging by several dozen percent behind the prices in other European countries.

The subscription fees, connected with the provision of services to gas consumers, will remain unchanged. No change will also be made to network charges, except for a reduction in charges payable by consumers falling into W-9B and W-9C tariff groups, connected to the distribution network of Pomorska Spółka Gazownictwa Sp. z o.o. It should be noted that the rules of settlements with customers will also remain unchanged.

The introduction of the new tariff was necessitated by a significant rise in foreign exchange rates (in particular a nearly 20% increase in the USD/PLN exchange rate) from mid-2011.

Tariff term

PGNiG SA once again suggested that the term of the tariff be shorter than a year. PGNiG's persistence in this respect arises from the need to ensure the Group's ability to react quickly to changes of gas prices on global markets. This approach is consistent with the expectations of PGNiG's customers, who want the cycle of changes in the prices of gas offered by PGNiG SA on the Polish market to correspond with the changes of gas prices in Europe. In line with the decision of the President of URE, the new tariff will remain in effect until the end of the year.

CHANGES IN CHARGES FOR THE SUPPLY OF NATURAL GAS TO CUSTOMERS CONNECTED TO THE DISTRIBUTION NETWORK

The tables below present the increase in monthly bills paid by households (VAT exclusive) reflecting the new natural gas prices and the unchanged rates of network charges and subscription fees.

HIGH-METHANE GAS (E GROUP, formerly designated as GZ-50)

NITROGEN-RICH GAS (Lw SUBGROUP, formerly designated as GZ-41,5)

NITROGEN-RICH GAS (Ls SUBGROUP, formerly designated as GZ-35)

Joanna Zakrzewska

Press Officer