Twitter has been abuzz with reports since Wednesday morning that PGNiG was supposed to lose billions of zlotys by speculating on indices gas prices. Radoslav Sikorsky stated that if these reports are confirmed and Law and Justice candidates in a state-owned company implement such a policy, government It must be sweeping.
The topic itself was started by a Twitter user who delved into the company’s reporting. According to him, they show that PGNiG has entered into derivative transactions that were supposed to speculate on gas prices, It only lost 1.5 billion PLN in the third quarter of 2021.
First, let’s explain what derivative coefficients are. PGNiG is abandoned to generate transaction losses swap, barter. In simple terms, it is a type of contract between two entities that defines the rules for reciprocal payments, depending on a specific market parameter, such as an interest rate or an exchange rate.
In this case, SWAP had to hedge the gas price of the Polish company. The data shows that PGNiG lost money during these operations. This is where the allegations of speculation that ended in failure of the company were raised.
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PGNiG: This is industry standard practice
Therefore, we asked PGNiG to explain these transactions to us. In response to the company’s press office, we can read an affirmation that there can be no speculative activity.
“The Company continuously implements a long-term strategy to manage the risk of fluctuations in commodity prices, currencies and interest rates. It is a widely accepted practice used throughout the industry“- We read.
For this purpose, the company uses SWAP contracts for gas price indices. PGNiG for money.pl assures that thanks to this, it is possible to reduce the impact of fluctuations in purchase and sale prices of gas fuel on the company’s financial results. Its value itself is derived from gas price indices.
“The sharp increase in gas prices in the third quarter of 2021 translated into a corresponding increase in the value of hedging instruments. In other words, the same volume of derivatives had a higher valuation due to the increase in the value of the asset,” according to the press office said in response.
PGNiG may incur a loss in hedging instruments
The company guarantees it “You may incur a loss in hedging instruments”Like other trading companies. Especially since – according to PGNiG – it was impossible to predict the dynamic increase in gas prices in the third quarter of 2021.
“However, please note that Payments on financial instruments are balanced by a positive result of activity in the actual market and vice versa. Instruments are introduced for the purpose of stabilizing the cash flow of activities in the physical market and not to take advantage of increases or decreases in commodity prices, currencies or interest rates. Therefore, the assessment of the operating activity of the segment must take into account all the elements that make up the financial result, and not just one component ”- says the company’s press service.