Natural gas producers and suppliers are invited on centralized markets under threat of fines

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The manufacturers and suppliers of gas will have to conclude agreements on centralized markets for at least 5% of the gas contracted between October-December 2016 whether the draft of the Government Emergency Ordinance published on the website of the Ministry of Energy will be adopted in this form. The measure was announced and explained by Aristotel Jude, Secretary of State, within the Energy Breakfast Club from August 31st, occasion upon which the official stated that the respective percentage shares are still subject to evaluation within the ministry, during the public consultation.

The draft of the GEO provides a calendar of a forced implemented transparency on the gas market by 2021 and is accompanied by a background note in which are set forth the arguments for introducing these obligations.

Obligations

For the period January 1st 2017 – December 31st 2021, the natural gas producers or their affiliates will be obliged by law to conclude for each calendar year, agreements on the centralized markets in Romania for the sale of a minimum annual amount of natural gas from the own production, which cannot be less than 40% of the natural gas sold and delivered by them in the respective calendar year.

Also, for the same period, the suppliers will have to conclude agreements on the centralized markets in Romania, according to the NARE regulations, for the purchase of a minimum annual amount of natural gas that cannot be less than 40% of natural gas purchased and received, in the respective calendar year. At the same time, the suppliers will be forced to sell to the end customers a minimum annual amount of natural gas that can not be less than 20% of the natural gas sold and delivered by the end of the calendar year, a minimum amount of gas, to the wholesale customers, which may not be less than 40% of the natural gas sold and delivered, by the supplier, in the respective calendar year.

Penalties

The manufacturers or their affiliates, as well as the suppliers who will not trade on the centralized markets the required minimum amounts for which they have obligation for trading, according to the law, shall be sanctioned with a fine between 1% and 3% of the annual turnover.

Arguments

“The considerations that were the basis for determining the minimum rates of buying and selling on the centralized markets, took into account the ensuring of a gradual process of transition from the predominant use of bilateral agreements towards the specific instruments of the centralized markets, also taking into account the structure of the final customers on the internal gas market. Imposing the swift implementation of these obligations aims to ensure the prior and timely conditions for the functioning of the gas market under transparent and non-discriminatory conditions and without affecting the security of the gas supply to the final customers after March 31st 2017, when the obligation set by Article 124, para. (1), let. e) of the Law on electricity and natural gas no. 123/2012, as amended and supplemented, it will not produce effects”, is explained in the substantiation note of the project.

Changes were determined, inter alia, by the need to solve, within the shortest time possible, the legal situation based on which the European Commission considers that Romania has violated articles of the Treaty regarding the Functioning of the European Union and the Directive 2009/73/EC of the European Parliament and the Council of July 13th 2009, concerning the common rules for the internal market in natural gas sector and the repealing of the Directive 2003/55/EC.

At the same time, it is also intended to ensure prerequisites required for the closing of the infringement procedure established by the case 2012/2114 and eliminating the imminent risk due to forward this case to the European Court of Justice and, consequently, eliminating the risk of imposing fines charged to the Romanian state.

The initiators of the project believe that in this way the prerequisites needed to fulfill the obligation assumed by Romania are ensured, as a member state of the European Union, to ensure a free market based on transparency, competitiveness and non-discrimination, to ensure the appropriate liquidity of the gas market, needed in Romania for the implementation of the provisions of the (EU) Regulation no. 312/2014 of the Commission from March 26th 2014, establishing a network code, regarding the balancing of the gas transmission network, prerequisite for ensuring the security of supply of natural gas to the final consumers at fair prices at real and equitable prices, based on demand and supply.

In his intervention at the Energy Breakfast Club from August 31st, organized by energynomics.ro, the Secretary of State Aristotel Jude, said that “in the gas market, there are bilateral agreements for 98.5% of Romania’s consumption. On the stock exchange only 1.5%, ie only 1.7 million MW was traded, out of a consumption of 121 million MW. There is no market without transactions”.

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Gabriel Avăcăriței

Journalist experienced with both old and new media, Gabriel has been the editor in chief of energynomics.ro since 2013. His great command in communication, organizing information and publishing are put to work every working day in order to develop all the projects of the energynomics.ro B2B communication platform: website, magazine, and own-events.

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