A possible liberalization of the gas market will result initially in a slight increase in the tariff, but in the end will lead to re-assessment on real economic basis of whole industry, says Gabriel Purice, president – general manager of the Romanian Commodities Exchange (BRM).
On the other hand, continuation of uncoordinated subsidy policy in the future can lead to emergence of situations like ELCEN, RADET or CE Oltenia, believes Purice.
“Our opinion is that 20-25% of the population has real need of subsidized prices of natural gas, the remainder can stand a liberalization of the market. We believe that subsidiesshould be granted directly to clearly disadvantaged groups within an organized social assistance, built on clear criteria of eligibility. Liberalization of gas prices in the future may encourage public awareness about the need for savings,” says Purice.
“We want to remind that in the past there have been similar discussions about the effects that liberalization of electricity and fuel prices could have on consumers. However, the gradual liberalization carried out in those two cases had no significant effects on the population in this respect (eg current traffic in Bucharest is a relevant indicator),” said Purice, according to Bursa.
He argues that BRM did not support imposing all the trading for natural gas contracts on the exchange. “At the end of 2016, when we were consulted on the matter by the Ministry of Energy (unlike 2017 when BRM opinion has presented no interest) to support gas market, we agreed with initial trading of a percentage accounting to 15-20% of the total volume of natural gas, and only for a limited period.
“BRM considers that market operators should provide benefits to market participants and draw them in this way to work through the stock exchange, while a radical measure that would impose a trading of 100% of the natural gas through the stock market would not be most suitable … Considering the European practice, we consider normal to keep bilateral trading agreements. By requiring their trading on exchanges, Romania would become the only member of the European Union with such legislation, both on the gas and electricity markets, “said Purice.
During 2016 BRM had on Natural Gas Floor a trading volume of over 15 million MWh, a volume that exceeds that of other regional markets (Hungary, Poland, Bulgaria). Compared to 2015, the volume of gas traded on BRM has grown more than fivefold.