Moldovagaz, the largest company in the Republic of Moldova, heads with confident strides towards bankruptcy. At least this shows the financial results published in the annual report of Moldovagaz, the neighboring country’s monopoly company in import and transport of gas.

The 2014 sales volume increased slightly, by about 100 million Moldovan lei (5 million euro) to 5.693 billion lei (284.65 million euros). In the same period, losses increased almost four times and reached the enormous figure of 2.34 billion lei (117 million euros), compared with 628 million lei (31.4 million euros) in 2013 and 174 million lei (8.7 million euros) in 2012.

The report shows that Moldovagaz debt increased in 2014 by 3.5 billion lei (175 million euros), past 11.5 billion lei (575 million euros), of which 8.87 billion of lei (443.5 million euros) are to Gazprom for the period 2006-2014. At the same time, Moldovagaz has to recover debts of over six billion lei (300 million euros). Much is the creation of the thermal power sector, according to mold-street.com, quoted euractiv.ro.

Main shareholder of the gas supplier Moldovagaz is Gazprom, which holds 50% stake. The Moldovan government has 35.33% and 13.44% of the shares are owned by Transnistrean authorities. The last time Moldovagaz had profit was in 2011, about 52.4 million lei (2.62 million euros).

In mid-March, Moldovagaz asked the National Agency for Energy Regulation (ANRE) in Moldova to increase the average gas tariff by about 48%, from the current level of 5.666 lei (283 euros) to 8,386 lei (419.3 euros) per thousand cubic meters. Moldovagaz representatives argue that the main reason for the need to revise the tariff is the expenditure increased for the purchase of gas, caused by the devaluation of the national currency against the dollar.

Thus the company’s losses from currency depreciation already exceeds 3.9 billion lei (195 million euros), of which 32 million lei (1.6 million euro) in 2011, 419 million lei (20.95 million euro) in 2012, 833 million lei (41.65 million euros) in 2013 and 2.632 billion lei (131.6 million euros) in 2014. However, the company’s debt to Gazprom is 5,22 billion dollars, of which 89% goes to the separatist region.

“Moldovagaz is in a difficult situation because it accumulates debt. Lately, Moldovagaz receives tough messages from Gazprom which says that for non-payment the amount of gas delivered will be reduced or delivery will be even stopped until payment of all debts”, said Iacob Cazacu, vice-president at Moldovagaz.

According to the manager, if the rate will not increase Moldovagaz will go bankrupt. With such financial losses is impossible to function, said Iacob Cazacu. ANRE Moldova postponed the decision on the tariffs for gas.