OMV Petrom presses for increase in regulated prices of natural gas in Romania.

By bne IntelliNews December 6, 2011
OMV Petrom raised the price of natural gas delivered to GDF Suez by 6% as of October 1 and negotiated a similar hike with E.ON, Adevarul daily reported. It is unclear what the other major gas producer, state-owned Romgaz will do but in a similar case in the past it chose raising the price too. GDF Suez has already notified the energy market regulator ANRE of the need for higher end-user prices prompted by Petrom's 6% price hike, as well as by the higher import prices. ANRE did not comment on either Petrom's price hike or the impact of the costly imports on the end-user prices. Under a government's ordinance, the regulated price for residential users will remain flat until the end of March 2012, at the expense of higher prices paid by the industrial users relying on regulated prices. IntelliNews Comment : The government has repeatedly delayed drafting a liberalisation calendar for the natural gas market, which was a promise made in the talks with the IMF and EC. Under the broad calendar agreed with the IMF, the non-residential market should be liberalised by 2013 and the residential market - in 2013-2015. The government has only taken preliminary steps by separating the residential and non-residential end-users into two categories, after they have benefited from the same regulated price until this year. The regulated price for non-residential users will predictably converge towards the import prices under a mechanism that has not been drafted yet. There are obstacles outside the government's reach that prevent the construction of a functioning natural gas market in Romania, including physical [lack of connections, large LNG terminals] and legal [binding exploitation contracts with OMV Petrom and Romgaz that expire in 2014].

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