Institutional problems on the northern rim of the Mediterranean

Faced with a potential gas deficit by the end of the present decade, the question is being raised as to how this will change the institutional framework. A theoretical analysis suggests it might be possible to move closer to a market system that would be more favorable to consumers, along the lines of recent British moves. The deep (80%) dependence of continental western Europe on four centralized producers (Gasunnie, GFU, Gazprom and Sonatrach) runs counter to this possibility, though. Gas benefits may be diverted from consumers to the club of producers by way of a tightening of the price discrimination rules. The example of Wintershall and its joint venture with Gazprom illustrates this trend counter to the wishes of the European Commission, and hints at the possibility of relative gas price rise scenarios, despite the many uncertainties involved. 1 tab