The extension of gas price liberalization schedule for households was obtained informally by the Minister for Energy, Răzvan Nicolescu, on August 27th, 2014, from the then European Commissioner for Energy, Gunther Oettinger, at the inauguration of gas pipeline interconnection between Romania and the Republic of Moldova, Iaşi – Ungheni. Subsequently, the Romanians sent, on September 4, to the European Commission (EC) a letter informing about the probability of being forced to postpone and extend the timetable for liberalization of the gas market for households.
“On 4th of September, I sent a letter to Oettinger in which I communicated that Romania will do the right thing for household gas consumers in our country”, said Răzvan Nicolescu. Miguel Arias Cañete, the current European Commissioner for Energy and Pierre Moscovici, European Commissioner for Economic Affairs, answered in a letter that they are surprised to hear that Romania has notified the extension of this calendar without written consent from the EC, and require compliance with previous commitments.
Asked about this situation, the Minister for Energy puts his mandate on the line in a bet that the liberalization of gas prices for households will happen as he originally announced. “I guarantee with my resignation that gas prices will not increase, that heating price for population will not grow. If it happens differently than I said, I’m willing to resign”, said Minister Răzvan Nicolescu.
The gas prices are lower, after the oil price declined and continues to decline, said Răzvan Nicolescu. The Department for Energy announced that prices for gas domestically produced and consumed by the population will increase by 1 July 2015, and the Government and ANRE will develop a new graphic for gas market deregulation, for the period July 1, 2015 – July 1, 2021.
Department for Energy says that, for CHPs producing for population, the EC agrees to apply the same gas price as for households. The institution says that there has never been a risk that population bills for heat and gas to increase from 1 January 2015. Iulian Iancu, PSD Deputy and Chairman of the Industry and Services Committee replied that it is a “false intervention that defies the Parliament.” Delegate Minister announced that he would sue Iulian Iancu and Andreea Paul Vass for insult and slander.
Victor Ponta: The Government respects firstly, the Parliament’s decision
Questioned on the letter received from the EC about the lack of a written agreement, Prime Minister Victor Ponta said that the Government will comply with, first, the decision of the Romanian Parliament regarding liberalization of gas prices for households.
“First, the Romanian Government complies with laws adopted by the Romanian Parliament and secondly we have a working relationship with the European Commission, so that Romania meets its obligations, but also take into account the interests of domestic consumers”, said Prime Minister Ponta.
Department for Energy has proposed EC to accept the postponement with two and a half years of the calendar for gas prices liberalization for the population and maintain, until at least 1st of July 2016, the current price for domestically produced gas. Delegate Minister of Energy says that, if necessary, may require solving Romania case to the European Court of Justice. In September, Nicolescu said the government will suspend indefinitely the liberalization for gas produced in Romania, destined for households, and will extend with at least two and a half years the deregulation of gas market for companies.
ANRE: Gas prices remain frozen until July 2015
From 1 July 2015, Romania will follow a different calendar for liberalization of gas prices, which will last until 2021. Until then, the price does not increase. The gas price for population will remain unchanged until the end of the first half of 2015, to be followed by a new timing for liberalization within the program agreed with the EU, until 2021, says Niculae Havrileţ, president of ANRE.
“For household consumers will continue the existing price schedule and a re-discussion of the steps until 2021, according to the law, starting with the second half of 2015”, says Havrileţ. According to him, the price of gas for households remains unchanged only until the middle of next year. Meanwhile, the Romanian authorities will negotiate with the EU a new liberalization schedule, the stages through which domestic gas price for households will be aligned with the market.
The Department for Energy confirmed that, following discussions with the IMF, it was agreed that regulators begin a new program of liberalization from 1st of July. Meanwhile, gas prices for residential sector remains unchanged. “The new liberalization chart will take into account the downward trend of oil price developments in the region, and the longer alignment of prices agreed with international financial institutions.”