Gas price cap, a populist decision that favors gas importers and suppliers – not consumers

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Bogdan Tudorache

The capping of the price of natural gas (together with the prices of other utilities), recently taken by the Government, favors gas importers and suppliers and affects consumers, according to the Intelligent Energy Association. Thousands of consumers are at risk by this state intervention to pay higher prices for natural gas than if prices would have been allowed to continue free their downward trend.

“In the gas market, we have an oversupply even before the appearance of the COVID-19 pandemic, which has determined from January 2020 prices to fall and even decrease sharply. The large amount of gas left in deposits at the end of the 2020 extraction cycle, the oversupply from imports, the measures to make more expensive the gas storage for the 2020/2021 cycle, all of these would have led to a further decrease in the price of natural gas in the next 5-6 months,” said Dumitru Chisăliță, president of the Intelligent Energy Association.

“The decision of the authorities is a populist one, which does not take into account these realities. This measure could change the current trend of sharp lowering of the price of the natural gas market in Romania,” added he.

According to the data of the Energy Intelligence Association, gas suppliers are experiencing a visible decrease in gas demand since the declaration of state of emergency (consumption decreased in March 2020 by 15-20% compared to consumption in March 2019) or even with the closure of some consumers. Therefore, lately they are renegotiating the contracts with the extension of the payment terms and the decrease in prices.

According to the association, authorities should amend the ordinance to prevent the price from rising above a certain threshold, existing at the time of issuance.

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