End-user natural gas prices paid by the industrial users in Romania might decrease soon as a result of the market reforms pursued by the government, energy minister Razvan Nicolescu was quoted as saying by news agency Agerpres.

Nicolescu confirmed that after the latest price hike scheduled for July 1, the pre-liberalisation process should be wrapped up and the market should be fully freed for non-residential users.

Under the pre-liberalisation process, the government and market regulator ANRE have increased the regulated price of the domestic natural gas towards the import price – supposed to be a benchmark for the free market price. As a result, the internal consumption decreased significantly – particularly in the chemical industry, down to the point where imports narrowed close to zero. Under these circumstances, it is unclear where the domestic market would stabilise on the free market particularly as i. the two trading floors are not actively used by buyers/sellers, ii. there are only two major domestic producers [hence weak competition] and iii. there are limited physical possibilities for exports.

Last year’s natural gas use decreased by 8.3% y/y to 12.45bn m3 with the use in the chemical industry dropping by 26.7% y/y to 2bn m3. Romania’s gas consumption peaked in 2006 at over 18bn m3, out of which 4.2bn m2 was used in the chemical industry. The industry’s gas consumption also decreased significantly to only two thirds of the peak 2006 consumption.