According to ANRE President Niculae Havrilet, if imports drop the hikes will fall by half.
In his turn, Energy Minister Razvan Nicolescu claims that in what concerns corporate consumers the extra price hike is no longer necessary as a result of convergence.
The government has taken the commitment before the International Monetary Fund (IMF) to give up regulated prices for electricity and natural gas. Consequently, the implementation of the deregulation of the natural gas price for household consumers will lead to a 2 percent price hike in July and 3 per cent in October, but if Russian natural gas imports are lower these price hikes could fall by half, Niculae Havrilet, President of the National Energy Regulatory Authority (ANRE), stated at the “Mediafax Talks about Energy” conference.
Household consumers have a longer timetable for the implementation of the natural gas price liberalization, namely until 2018, a deadline that could nevertheless be extended by a year. In what concerns corporate consumers, the extra price hike is no longer necessary because the tariffs have already fallen in line with those of regional countries, Energy Minister Razvan Nicolescu stated at the event.
“We have real potential for Romania to produce more energy and natural gas than it consumes in the second half of 2019, provided the natural gas consumption level remains the same. We have the chance to become, probably alongside Denmark, one of the European countries that produce more energy than they consume,” Nicolescu stated. He added that Romania’s strategic direction should be a more balanced energy mix. According to the minister, OMV Petrom, Exxon and Transgaz Medias companies have signed last week an agreement through which the natural gas produced in the Black Sea will be transferred to the national natural gas transportation network. The minister also stated that he hopes that in October the Energy Department will publicly present a first draft of the new energy strategy on which 25 people from the energy sector are working, even though the deadline is ambitious. At the same time, Nicolescu pointed out that it is clear that Romania has made too much progress in a far too short time in the renewable energy domain, and from now one there is need for cautious development.
Electrica on LSE
The Government will also start to play a more active role in the company where they have minority stakes, same as Proprietatea Fund, said Minister Delegate for Energy. He announced on this occasion that Electrica Company, government owned, launched its intention to be listed on the London Stock Exchange, on Friday morning, May 30. “It is a company with very good performance and financial prospects, it has a profit margin comparable with the other suppliers. It is a secure business, guaranteed to be a very good investment made in a certain regional context,” said Nicolescu.
The listing is scheduled for June, according to the commitment made by the Government to the IMF. The IPO by which Electrica aims to sell new shares on the stock exchange accounting for 105 per cent of its shares capital will be held in three trenches, and the investors can buy shares both on Bucharest Stock Exchange as well as global depositary receipts on the London Stock Exchange. The government aims to transfer 51 per cent of the company shares to private investors through this IPO.
According to information published on the company website, Electrica reported during the first quarter a net consolidated profit, without the minority shares, of RON 60 million (EUR 13.4 million), slightly below on a year-on-year basis, and they got RON 243.4 million (EUR 55million) on the entire 2013, 32 per cent below compared to 2012. As for Hidroelectrica, they concluded 12 contracts for power supply on the energy stock exchange with seven companies, their total value amounting to RON 50 million (about EUR 11 million), announced the power producer.
‘Pole tax’ might increase the electricity bill 1-2 pc as of January 1, 2015
Pole tax continues to be a measure rejected by the investors. The regulated electricity price might rise by 1-2 percent as of January 1, 2015, after the companies operating in the sector will request the acknowledgment of the so called ‘pole tax’ (a tax on special constructions) in the end electricity fees, according to the president of the ANRE. Tax returns filed for the special structures last Monday stood at an aggregate of roughly one billion lei, twice the amount set forth in the budget, Secretary of State with the Public Finance Ministry Dan Manolescu announced last week. In early April, Minister-delegate for the Budget Liviu Voinea said that estimates of collections from the tax on special structures stand at RON 1.5 billion, but just RON 488 million have been set in the 2014 budget blueprint because of the non-collection risk. The tax on special structures is 1.5 percent of their value; the tax is charged only on legal entities and will be levied on transmission networks, poles, warehouses and depots. The measure targets the companies that own such structures, like E.ON, Enel, Transelectrica, Transgaz and Romgaz. As for lawyer Remus Borza, chief of Euro Insol company that manages Hidroelectrica during its insolvency, he said the power producers will not be able to withstand the “pole tax” which is “unsustainable and burdening,” sapping companies’ profits.