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September 18, 2020

Niculae, InterAgro: We will close the last two plants of the group on April 1

The liberalisation of the Romanian market of natural gas will have as immediate effect high prices for consumers, losses for the state budget and unemployment.

The producer of chemical fertilisers InterAgro will close this year the last two plants of the group, the president of the InterAgro group, Ioan Niculae announced yesterday during a press conference in which he presented the results of the study ‘Strategic evaluation of the impact of the liberalisation of the natural gas market upon industrial consumers in Romania,’ conducted by the consultancy firm Deloitte, at the request of the Romanian Confederation of Employers in Industry, Agriculture, Constructions and Services (CONPIROM), economica.net reports, quoting Agerpres.
“April 1, 2014 will be the black Tuesday of Romanian industry. 2013 is the first year of the last 20 when Romanian industry will completely close doors and millions of jobs will disappear. Take into consideration that I have never said something that was not confirmed, so far,” Niculae warned.
According to the source, the InterAgro group now operates only two fertiliser plants, out of seven.
The results of the study unveil a disastrous scenario, which could soon result in losses of EUR 6 bln from the GDP and an increase of unemployed by 500,000, the consultants believe.
According to Deloitte, the price of domestically produced gas for industrial consumers will soar by 24 pc, starting April 1, 2014, under the liberalisation calendar of the gas market, said Valeriu Binig, director with the consultancy firm. “We asked the government to cancel this price increase and redraw the liberalisation calendar,” explained Vasile Turcu, president of CONPIROM.
The price of gas extracted in Romania will go up 143 pc over the next two years, under the liberalisation calendar of the gas market, which means that industrial consumers will pay prices 72 pc higher than now, Binig mentioned. According to the National Regulatory Authority for Energy, in March this year, industrial consumers used 28 pc imported gas and the remainder from the domestic production. The Deloitte official reminded that, in Romania, industry contributes 32 pc of the GDP.
“Market is not sufficiently mature for the double liberalisation, but in the wholesale and retail segments. One must develop the storage facilities and set in place rules for using these capacities. We must see whether we should keep the gas basket or not,” Binig added. According to the same source, the European Union must take into account that Romania is a frontier market, subject to political risks, plus it has only one import source, respectively the Russian Federation. Meanwhile, other European states, like the United Kingdom, have 10 or more sources of gas supply. More than that, Romania risks re-entering in recession if it complies with the current timetable for the liberalization of the gas, Binig said.
Adding to this, the history of the Romanian gas market shows that the country paid higher prices than the rest of European states for Russian gas. Under the liberalisation calendar of the Russian gas market, agreed upon by the Romanian Government and the IMF, the total liberalisation for industry will be enforced on December 31, 2014, but during the latest visit of the IMF delegation Romanian authorities committed themselves to liberalising the industrial market six months earlier, respectively on June 31, 2014.

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