CIR: Big natural gas producers affected by rapid price liberalization


Although the big companies’ natural gas production registered slight growth last year, sales and results significantly diminished. “The motivation for this absolutely unacceptable situation is simple: very high prices that have led to a drastic fall in internal consumption, a fall by 8-10 per cent according to preliminary estimates. (…) The situation is the more delicate as we are barely halfway through the liberalization timetable, new substantial hikes in the price of locally produced natural gas set to occur this year,” the Romanian Investors’ Council (CIR), which represents the Local Investors’ Forum Association (FIA), stated in a press release warning the authorities that the rapid liberalization of the natural gas price will have a negative impact on the Romanian economy, an aspect also reiterated in the memorandum addressed to the joint IMF-EC-WB mission.

Moreover, by applying the legislation concerning the structure of the mix of internally produced and imported natural gas, ANRE has basically instituted several types of natural gas “baskets,” consisting of imports in proportion of 5 per cent at most. “Since Romania produces only approximately 75-80 per cent of the natural gas it consumes, over 96 per cent of the import burden has ended up being shouldered by industrial consumers! As a result of this difficult situation registered on the natural gas market, industrial capacities have been reduced, the production of the main branches affected has diminished – the steel and metallurgy industry, car industry, glass and ceramics industry, chemical industry. In the best of cases the companies have sent their employees on technical leave, over extended periods, all of this because of the gas price hike,” CIR adds.

That is why CIR has proposed and continues to support the adoption of legislative measures that would lead to the elimination of the “gas basket” system for all eligible consumers, the removal of CETs from the regulated market and their transfer to the free market, the amending of Annex 1 of Government Decision 22/2013 by a gas price hike timetable that would extend over a longer period, as a consequence of the prolongation of the price liberalization timetable, the reduction of transport tariffs or the instituting of a mechanism of applying commercial discounts on the supplying of natural gas to consumers that can be cut off, the creation of natural gas transaction facilities for one-week, one-month, one-quarter, one-year contracts.

 

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