Romania liberalizes gas prices, gov’t warns big suppliers not to speculate prices

Romania began the final stage of liberalizing gas prices on Wednesday with an estimated 3.4 million household customers transferring from the regulated gas market to the competitive one.

Romania’s Competition Council said there must be normal competitive environment in the sector where two large suppliers provide about 90 % of residential consumption.

Larger companies must act responsibly toward smaller competitors and customers and not abuse the dominant position or enter into anti-competitive agreements.

Economy Minister Virgil Popescu said prices should drop by 10-15%, but the two big suppliers were speculating prices.

“I’m a bit disappointed by the reaction from suppliers, especially the big ones that have a big market, and tried to take advantage of the fact that Romanians are conservative and hey don’t inform themselves properly,” he told national news agency Agerpres.

He said the government would intervene if the major suppliers speculated the changes and raised prices.

Fair prices are calculated based on declared transport and distribution fees. local NGO Energia Inteligenta (Smart Energy) reviewed the offers of all 35 natural gas suppliers on the market and has found significant price differences.

According to a study conducted by the Intelligent Energy Association, there are 10 suppliers that offer natural gas to the current consumers of ENGIE below the price it offers and 16 suppliers (offers) that offer natural gas below the price offered by E.ON for its current consumers.

The two leading suppliers, E.ON Energie and Engie, have submitted offers with marginally lower prices than the current ones. The current price charged by E.ON is RON 134.2 per MWh, and the offer to be enforced as of July 1 is RON 131.9 per MWh. At Engie, the current price is RON 125.2 per MWh, and the new proposal is RON 124.9 per MWh.

Electricity prices will be fully liberalized starting January 1, 2021.

“Producers were among the losers… because they were forced to sell electricity and natural gas at lower prices to domestic consumers,” Popescu said. “For distributors, however, it was a beneficial measure, because lowering the producer’s price and maintaining prices for households simultaneously increased the distributors’ profits.”

 “By forcing the producers to sell electricity and natural gas to households at a low price, a quantity of electricity and natural gas was removed from the market, and less electricity and natural gas remained for Romanian industrial consumers,” he said.

Romanian consumers still pay relatively low prices for electricity, one of the lowest in the 28-member European Union.


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