Gas reference prices in Romania, calculated according to CEGH Vienna quotations

National Agency for Mineral Resources (ANMR) on Friday issued the order by which the reference price for natural gas extracted in Romania, according to which the royalty payable to the state budget by the producers will be calculated, will take into account the quotations from Central European Gas Hub AG (CEGH), located in Vienna, Austria, the leading hub for gas trading in Central and Eastern Europe, a press release informs.

The order was submitted for publication to the Official Gazette and shall come into force from the date of its publication.

Thus, ANRM implements the decisions of the Court of Accounts in 2010 and 2015.

The Court of Accounts has determined that, by failing to update the gas reference price in 2008, the Romanian state lost about RON 7 billion during 2008-2015.

According to Gigi Dragomir, President of ANRM, the new reference price does not mean a doubling of the gas price to final consumers, but the right conditions for both producers and the Romanian state, given that gas prices have been liberalized, but a reference price is maintained at the level of 2008.

In a February 7 debate on this order, which brought together representatives of ANRM and those of gas producers, the latter argued that the option of a gas price calculation based on quotations from an external exchange is the worst possible and they asked for a calculation formula that takes into account either the price in their contracts or the quotations from the Romanian gas exchanges.

Romanian Commodities Exchange (BRM) representatives have shown that the Romanian gas market is just at the beginning, so immature and irrelevant, while also pointing out that the price at CEGH Gas Exchange Spot Market is about the same.

The reference price for the calculation of royalties has not been updated since 2008 and is currently estimated at RON 45 per MWh, compared to RON 89-90 per MWh, as is the market price.