Romanian energy regulator adopts energy price liberalisation calendar.

By bne IntelliNews July 2, 2012
Romanian energy market regulator ANRE has endorsed and published on its web site the calendars, under which the regulated electricity and natural gas prices will be gradually phased out until 2018. The documents were prepared by the government in discussions with the IFIs. In the electricity market, the distribution companies will have to gradually increase the share of energy sources from the free wholesale market to 100% by end-2013 for non-residential consumers and by end-2017 for residential consumers. We recall that under the electricity market liberalisation model, residential and small industrial end-users will still have the right to benefit from regulated prices under a cost plus system if they are not able to engage in direct contracts with distribution firms. In the natural gas market, the obligation of the distributors to source their deliveries from the free market will be parallel with the gradual rise in regulated prices of the domestic gas to what is defined as the liberalised price. The government had proposed and ANRE approved a gradual rise in the regulated price of the domestic natural gas expressed in local currency from current RON 49 (EUR 11) per MWh for non-residential users and RON 47.5 per MWh for residential users up to RON 119 per MWh which is defined as the liberalised price of the natural gas, irrespective of the exchange rate fluctuations, inflation or a change in the gas price globally. The managed rise in the price of the domestic gas is necessary since no functioning market for domestic gas is in place and there are only two producers. The gradual rise of prices will be completed at the end of Q3/2014 for non-residential users and at the end of Q3/2018 for the residential users. As a combination of the two liberalisation moves on the natural gas market, ANRE estimates end-user price hikes. Non-residential users will face annual price hikes of 18% in each 2013 and 2014. Residential users will face a 10% price hike in each 2013 and 2014 followed by annual hikes of 12% in the period of 2015-2018. Nonetheless, the government has stressed that the calendar for energy price liberalisation might be adjusted in case the social impact is too strong. Most likely, the specification refers to the case when rising gas prices on the external market would force the actual end-user prices above those estimated under the liberalisation calendar.

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