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October 31, 2020

Tax on additional incomes of gas and electricity companies, starting 2013

Hidroelectrica will be listed by public offer after insolvency procedure is cancelled, according to the fiscal and economic policy memorandum assumed by the government with the IMF.

Starting 2013, the government plans to enforce a tax on the extraordinary incomes of gas and electricity companies, and at the middle of next years it will also enact a new regulation and taxation regime for oil and gas companies. “We created an inter-ministerial committee, led by the Ministry of Public Finance, which prepares a package of taxes, royalties and regulations, also by consulting the oil, gas and electricity companies,” reads the Memorandum of economic and financial policies signed by the government with the International Monetary Fund, a document obtained by Mediafax.
The regulatory package will have two parts, the former about the fiscal contribution enforced by the Executive upon the “extraordinary” incomes earned by gas and electricity companies after the liberalisation of prices to energy and gas. Economy Minister Daniel Chitoiu said, in May this year, that the money thus collected will be directed to a special fund that will serve to support vulnerable consumers.
The latter part of the package will provide a new taxation and regulatory regime of the oil and gas sector, for 2015-2024. These regulations will be drafted by the end of this year.
Romanian authorities promised the IMF to integrally liberalise the prices of oil and gas until year 2018, in phases and of a differentiate manner for industrial and domestic consumers. The price of gas for population will increase by 10 pc a year in 2013 and 2014, then by 12 pc each year during 2015-2018, while the liberalisation of the energy market will begin in September, with the industrial consumers.
The prices paid by population are regulated by the Romanian Energy Regulatory Authority (ANRE), out of considerations that pertain to social protection, but the European Commission and the IMF demanded the government to liberalise the market and bring prices to the levels used in Europe.
In its turn, Bucharest committed itself to making public the liberalisation calendars of gas and electricity prices by mid-September. Royalties for oil and gas, ranging between 3.5 and 13 pc of the production, are to remain unchanged from 2004 until December 2014. These taxes were set through the privatisation contract of Petrom with Austrian group OMV.
The state budget earns each year mining and oil royalties which amount to a total RON 1 bln (EUR 225 M).
Romgaz, listed almost six months later than planned
The listing on the stock exchange of natural gas producer Romgaz Medias will occur until the end of March 2013, almost six months later than planned, after a consultant will evaluate the gas reserves controlled by the state-run company. “We are undergoing a process of hiring a consultant that will conduct the evaluation, which we hope to be ready until the end of the year,” reads the memorandum of fiscal and economic policies assumed by the government with the IMF.
A consortium formed of Goldman Sachs, Erste, BCR, Raiffeiesen Capital&Investment (RCI) will intermediate the offer in which 15 pc of Romgaz shares will be floated on the Bucharest Stock Exchange. The listing of Romgaz – same as Hidroelectrica – was originally planned for mid-October at latest, under the previous commitments of the Executive. “We will miss the mid-October deadline set for the sale of the Romgaz and Hidroelectrica shares. We intend to list by initial public offering 10 pc of the capital of Hidroelectrica, after it exits insolvency,” reads the memorandum. Hidroelectrica entered an insolvency procedure in June.
National gas carrier Transgaz Medias will conduct, at mid-September, a secondary public offering aimed at selling on the stock exchange 15 pc of its shares. The operation was initially planned for the end of June, but it got delayed on technical reasons. Transgaz is listed on the bourse since 2008, with a package representing 10 pc of its shares. In a different move, the government also committed itself to speeding up the preparations in view of selling a 10 pc stake in Nuclearelectrica, but it will miss by three months the deadline initially set for the end of 2012. Nuclearelectrica operates the Cernavoda Nuclear Power Plant.

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