Romania caps energy prices again

A new scheme prepared by the Romanian government aimed at reducing the impact of price hikes in electricity and gas will be applied until April 1st 2023

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Corina Cristea, 15.03.2022, 14:00

In an attempt to ease the pressure caused by higher energy and gas bills, the government in Bucharest will endorse new support measures to be approved through an emergency ordinance. A decision was needed in this respect because the previous measures to support companies and household consumers, which have been applied from November, are valid only until April 1st.

According to Energy Minister Virgil Popescu, the measures have already been discussed with representatives of the Romanian Energy Regulatory Authority, as well as with energy providers and distributors.

Virgil Popescu: “We are waiting for the Regulatory Authority to integrate into the emergency ordinance some issues that are related to regulation fees. After we have completed talks with all the market players we next want this emergency ordinance endorsed so that we may have the new scheme operational starting April 1st.”

The new government solutions presented on Monday by Prime Minister Nicolae Ciuca include caps and subsidies for the aforementioned utilities. Electricity and gas will be capped for a year, and according to the Prime Minister the measure will offer the business environment and citizens stability in accordance with free market rules

Nicolae Ciuca: “Household consumers will benefit from a social fee of 0.68 lei per kilowatt, including the VAT for households with a monthly consumption up to 100 kilowatts. Household consumers with a monthly consumption between 100 and 300 kilowatts will have to pay 0.8 lei per kilowatt whereas consumers with an annual consumption up to 12 hundred cubic meters are to pay 0.31 lei per kilowatt”.

The impact of these measures has been estimated around 3 billion euros by the end of the year. But a survey by the Intelligent Energy Association reminds that Romania is one of the three European countries, which decided to cap prices to support their population. However, the capped price is 1.7 higher than the market price and that makes the aforementioned support measures the least effective in the EU. The new measures are even less significant if we take into account that Romania is the second country in the EU in terms of the negative impact energy bills have upon the family budget – double than the European average in 2022, the survey also shows.

(bill)