Concerns over energy prices

Romanians may face higher heating costs this year due to the rise in gas prices.

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Leyla Cheamil, 25.08.2021, 14:00

The latest developments on the energy market have sparked concerns among consumers, the vulnerable ones in particular. Data made public two weeks ago by the National Statistics Institute shows that electricity and natural gas prices have increased the most in the past year. Thus, between July 2020 and July 2021, electricity prices went up by 24.65% and natural gas prices by 20.55%. Romanians may pay, in the upcoming winter, the highest gas and energy bills the country has seen, a direct consequence of the rise in prices on the stock exchange market. The price of natural gas will reach an all time high, triggering a significant increase in the number of vulnerable consumers and affecting the entire industry, according to the Smart Energy Association. The average price has been put at 450 dollars per one thousand cubic metres for all consumers in the country.

Dumitru Chisăliţă, President of the Association: “The level of energy poverty or the price – salary ratio will be similar to that of 2010. If we analyse what has happened in 107 years, the dollar equivalent of the bill the final consumer will have to pay is the biggest one since 1914, when natural gas started to be used and sold in Romania. The problem it triggers is that it closes down trade companies, leaving people out of jobs, people that must receive unemployment benefits. Also, the VAT and the taxes on health insurance and labour can no longer be collected to the state budget, so the state loses as well.”

Shutting down an industry opens the door to imports, Dumitru Chisalita also warned. Imports mean trade balance deficit, which involves many macroeconomic problems that will emerge, he went on to say.

As regards consumers, Energy Minister Virgil Popescu said recently that the vulnerable consumer law may take effect this winter. The law allows for subsidies for heating to be granted to low-income families. This topic has been discussed at a meeting of PM Florin Citu with the Energy Minister, representatives of the Competition Council and of the Energy Regulatory Authority, in the context of the recent rise in energy and gas prices. Virgil Popescu has urged people who have not yet signed a contract with the supplier to pick the best offer on the free market, to benefit better prices. In his turn, PM Florin Citu gave assurances that the vulnerable consumer law would be adopted by Parliament as soon as possible. He also said that this upcoming winter the state would partially cover heating bills for all consumers. (EE)