The Competition Council in Latvia has approved the acquisition of Latvijas Propāna Gāze by Baltic Gas Solutions, a newly established company within the AVH Grupp AS group. AVH Grupp AS is mainly involved in energy, metal surface treatment, real estate leasing and management, metal wholesale, and publishing activities.

In contrast, Latvijas Propāna Gāze specializes in wholesale and retail of liquefied petroleum gas (LPG) with a network of filling stations and storage bases across Latvia. The merger is not expected to significantly alter the market structure or reduce competition in the LPG wholesale market in Latvia.

However, the Competition Council has highlighted the upcoming sanctions in 2024, which will impact the LPG wholesale market and supply in Latvia. This will require market participants to seek alternative supply sources and logistics solutions due to the inability to rely on Russian Federation for LPG supply post-sanctions.

As a result of the acquisition, Baltic Gas Solutions will gain significant control over the SNG terminal in the Riga Freeport area, potentially leading to a dominant position in the LPG supply and wholesale market in Latvia post-sanctions, with forecasts indicating a decrease in market share for close competitors.

Under Competition Law, abuse of dominant position is prohibited, and the conditions for its application include a market participant being in a dominant position where they can significantly impede, restrict, or distort competition over a sustained period, independently of competitors, customers, suppliers, or consumers.