The budget revision allocates insufficient funds to relevant ministries, which represent 25% of what is needed to finance the energy ceiling and exposes to a major risk the ability of the entire energy sector to function, claims the ACUE federation.
Thus, the amount foreseen by the current budget revision, of 2.5 billion lei for the Ministry of Energy, represents only 7.7% of the financing requirement estimated by the ministry (31 billion lei) to cover the commitments assumed by the Government only through GEO 27/2022, until the end of 2022, respectively paying the differences between the real price of non-household consumers’ bills and the capped price of energy.
At the same time, the amount provided by the current budget revision, of 7.3 billion for the Ministry of Labor and Social Solidarity for the entire “Social Assistance” chapter, is far below the funding requirement estimated by the ACUE Federation at the request of the authorities (of 8.4 billion lei) for covering the commitments assumed by the Government through GEO 27/2022, until the end of 2022, i.e. paying the differences between the real price of household consumer bills and the capped price of energy.
“The current budget revision does not include the amounts necessary to cover the price ceilings assumed by the Romanian state for the period April – December 2022 and exposes the ability of the entire energy sector to function at a major risk.
“In the local and international context, marked by a steep increase in the price of energy and many uncertainties regarding the security of supply, the decision to subfinance a support scheme assumed by the Romanian state, which benefits approximately 90% of customers domestic and non-domestic, represents an additional major risk that seriously affects the resilience of the entire energy sector,” ACUE officials say, in tandem with a similar statement from the Concordia confederation.
The authorities have full visibility of the energy market and do not have to wait, as they have stated, for the April 2022 settlements to correctly estimate the financing requirement. It is worrying that the authorities do not have a perspective of the developments in the local energy market and evade the obligation to ensure the necessary funds, by invoking delays in the settlement process, which were also created by state institutions, through provisions and procedures issued late, faulty and unclear.
“The money is not for suppliers, but for energy consumers. The suppliers provide this customer support in advance, from their own funds. So, directly and immediately, this decision risks generating a blockage at the level of the supply activity, but the subsequent impact will be felt at the level of the entire energy sector and, ultimately, at the end customers,” says Daniela Dărăban, Executive Director of ACUE, the Federation of Associations of Energy Utility Companies.
For the budget revision project subject to public debate, ACUE considers that the Ministry of Public Finance has the duty to ensure a realistic budgeting of the commitments made towards the final customers, through the ceiling schemes in force, the adaptation of the work scenarios to the reality of the market, in order to ensure the functioning in sustainable conditions of the energy sector and transparency in the establishment and prior authorization of public revenues and expenditures.
At the same time, for the optimal implementation of the support schemes, ACUE considers that the public institutions involved in the settlement process have the duty to ensure the recovery of the 5-month gap for the settlement of the measures taken for the support schemes, including through the option of deducting the amounts arrears from suppliers’ fiscal obligations and/or the delay of payment terms on the supply chain and a settlement process within the term provided for by the legal framework (45 days), by urgently adopting clear, explicit and transparent settlement and payment request assessment procedures.
The role of suppliers is to continue supplying energy to customers. The non-coverage of the sums committed by GEO 27/2022 on time and at the real value highly affects the suppliers’ ability to support the purchase of energy, the storage for the cold season and the financial flow in the chain, with an impact on the stability of the energy supply, for industries and for every citizen. The role of suppliers, that of collecting through the final price on the invoice, all the costs associated with the energy sector (production, transport, distribution, taxes, VAT, excises, etc.) is seriously affected by the under-dimensioning of payment volumes and the delay of settlements.
Given that, from the price increases recorded in the energy production area, the Romanian state collected significant revenues (over 11 billion lei, only from the taxation of additional revenues), the proposal to allocate less than 25% of the necessary for support measures to final customers unbalances the entire national energy sector, in the context in which all EU member states recommend measures to strengthen the resilience of this sector.
“Almost 10 months after the adoption of a social policy concept, by using economic agents from the supply sector as intermediaries and pre-financiers, it became clear that the adopted protection schemes are difficult to implement and unsustainable,” says Daniela Dărăban.
In order to avoid unwanted effects, ACUE believes that it is imperative to review and plan protective measures in line with market realities and in line with good European practices. In this sense, ACUE supports the gradual adjustment of the ceilings, the provision of direct benefits for consumers and the targeted protection of low-income people and economic sectors with high ratios of energy costs.
