Natural gas price for Romanian industrial users might decrease – energy minister

By bne IntelliNews May 26, 2014

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.

DOMESTIC USE OF NATURAL GAS (mn m3)
  2005 2006 2007 2008 2009 2010 2011 2012 2013
Total 17,588 18,109 16,619 15,491 13,148 13,777 14,157 13,579 12,448
Internal use 1,279 1,255 1,168 1,050 1,023 1,215 1,205 1,227 1,121
Households 2,290 2,782 2,597 2,767 2,695 2,804 2,934 2,815 2,785
Chemistry 4,196 3,567 3,066 2,988 2,622 2,867 2,798 2,760 2,023
Other industrial 3,132 3,296 3,588 3,017 2,165 2,218 2,280 2,175 1,894
Power / heating 4,835 5,335 4,729 4,116 3,288 3,110 3,319 3,240 3,188
Commercial 716 768 744 944 794 1,007 1,014 822 942
Other non-HH 492 560 555 608 563 550 563 539 495
Source: ANRE

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