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Finance Ministry proposes capping the gas price to RON 55/Mwh. Fin Min Teodorovici: It’s a communist measure up to a point…

The Finance Ministry proposes the capping of natural gas price from domestic production until June 30, 2021 to RON 55/Mwh, a draft project posted on the website reads.

“In order to ensure a competitive environment in the natural gas sector in Romania and to stop the uncontrollable growth of gas price from domestic production, the MFP representatives met on Wednesday, July 18, to analyse the possibility to set up forms to control the gas price used by domestic producers until June 30, 2021,” the Finance Ministry informs, quoted by hotnews.ro.

The project to cap the gas price from domestic production is necessary, MFP argues, because the liberalisation of sale price for natural gas, imposed after April 1, 2017, has led to the continuous growth of prices, by 29.5% and the estimated growth in March 2019 is of 33.75%.

The grounding note reads that the sale price of natural gas by domestic producers on the centralised market during April 2017-August 2018 has grown from RON 70.92 to RON 77.72.

Fin Min Teodorovici: It’s a communist measure up to a point, but necessary

“Some people say this is a communist measure. Yes, it could seem like one, at first glance, it is up to a point. But we are talking about competition. What competition? There are two operators which increase the prices one by one, and the other one reacts immediately. The assumed investments haven’t been completed, but the price is increasing unjustifiably, people suffer and the economy suffers. And some call it a communist measure. I had no connection with communism,” Finance Minister Eugen Teodorovici said on Thursday, during the conference occasioned by the launching of the SME’s White Book, antena3.ro informs.

Teodorovici was hinting at the two operators on the gas market, Romgaz and OMV Petrom, for unjustifiably increasing the prices, without completing the assumed investments.

Minister Teodorovici said the draft will be discussed for the first time during the Government sitting later on Thursday.

“The draft will be read for the first time. Nothing is to be adopted today.  (…) I believe the decision is fully justified. I should be the first one to oppose such measures, because implicitly the state budget will register some loss. We should look at the second effect, as it was the case of the Tax Code in 2015. If we look at the second round effects, it is a logical measure and will actually bring more money to the budget,” Teodorovici added, according to hotnews.ro.

 

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