FPPG: Regulated prices and the 2% tax to ANRE blocked liberalization and distorted the energy market

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The Oil and Gas Employers’ Federation – FPPG welcomes the initiative of the Romanian Parliament to amend the GEO 114/2018 and calls for the abrogation by the Parliament of Romania, in the current extraordinary session, of the regulated prices to the natural gas producers and for the elimination of the 2% tax that the companies from the energy field they are obliged to pay it to the National Energy Regulatory Authority – ANRE. The measures provided in the Ordinance have led to the appearance of errors that have caused the distortion and halting of the process of liberalization of the energy market, FPPG pleads in a press release.

The FPPG offers to the state institutions the recent Emerton study which proposes a roadmap for ensuring the security of supply, financial accessibility and competitiveness of natural gas in Romania.

“The Oil and Gas Employers’ Federation has promoted in the last months the dialogue between gas producers, distributors and suppliers of gas and the state institutions, in order to reach the best solution in which the invoices of the domestic customers are reasonable and at the same time the gas market develops, still free and competitive. Ensuring sound and sustainable protection for vulnerable energy consumers is an essential element of liberalizing the retail market for domestic customers, which allows the entire population to meet their energy needs at an affordable cost. Emerton experts propose in the above-mentioned study mechanisms for protecting vulnerable consumers that can be implemented in the Romanian market”, says Daniel Apostol – Director of External Relations within the FPPG.

Despite substantial progress towards the liberalization of the gas market in recent years and until the end of 2018, the evolution of Romania’s natural gas sector towards a mature and attractive market is hampered by major obstacles such as the low liquidity of the wholesale gas market, which does not encourage investments in gas production or competition in the retail market. FPPG also mentions lack of transparency and predictability in terms of regulations and mechanisms operating in the market, limiting the attractiveness of the segment for potential new players in the market, and lack of an efficient scheme to protect vulnerable energy consumers.

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