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February 25, 2021
COMPANIES ECONOMY

Liberalisation of domestic natural gas market: Energy Ministry proposes suspension of timetable until 31 March 2017

The Energy Ministry has launched for public debate a draft Government decision that proposes the suspension of the liberalisation timetable from 1 July 2016 to 31 March 2017, and a price of RON 60 per MWh during this period for the domestically-produced natural gas sold to household consumers and district heating plants.

“The stipulations of Government Decision no.488/2015 on setting the price of domestically produced natural gas for household consumers and district heating plants, solely for the quantities of natural gas used in producing heating in cogeneration plants and in district heating plants, from 1 July 2015 to 30 June 2021, is suspended from 1 July 2016 to 31 March 2017. From 1 July 2016 to 31 March 2017, the price of domestically-produced natural gas for household consumers and district heating plants, solely for the quantities of natural gas used in producing heating in cogeneration plants and in district heating plants, is RON 60 per MWh,” the draft government decision reads.

At the same time, the procurement price of domestically produced natural gas from underground storage sites, procured starting on 1 July 2016, will be, for household consumers and district heating plants, the price from the period in which the natural gas was injected in storage, plus tariffs related to underground storage services, as approved by the Energy Regulatory Authority (ANRE), the draft adds.

Likewise, ANRE has to carry out an analysis, by 1 March 2017, on the procurement price of domestically-produced natural gas for household consumers and district heating plants.

According to the liberalisation timetable, introduced by government decision no.488/2015, starting on July 1 this year the price of domestically-produced natural gas should rise by 10 percent for household consumers and district heating plants, from RON 60 to RON 66 per MWh.

In mid-May, ANRE President Niculae Havrilet asked the Government to abrogate government decision no.488/2015 since a 10 percent price hike on July 1 would mean that the regulated price becomes higher than the free market price, which currently stands at RON 63 per MWh.

Likewise, in mid-June, Havrilet pointed out that next winter the imported natural gas will have a price 20 percent lower than the price of stored domestically-produced natural gas, so that we would rather prefer importing over 30 percent of the natural gas consumed instead of using stored natural gas.

According to him, if there is a 10 percent hike on July 1, as stipulated by the liberalisation timetable, those who supply natural gas to household consumers will have to come up with a basket of natural gas that would have the lowest price. Basically, imports could end up covering 70 percent of demand if the basket would in this way end up being the cheapest, the ANRE President added.

 

 

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