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ROPEPCA: Deregulation of gas prices is merely the first step

28 August 2019
Consumers
energynomics

The Romanian Petroleum Exploration and Production Companies Association – ROPEPCA appreciates as beneficial and necessary the proposal of the Commission of Industries and Services of the Chamber of Deputies regarding the repeal of the articles referring to the energy field in the Government Emergency Ordinance no. 114/2018 and hopes that the same thing will happen in the rapporteur committees. The provisions in the ordinance cap the price of gas at the producer and introduce a new contribution of 2%, thus leading to the artificial increase of the unregulated price and the reduction of investments, considers ROPEPCA. In addition, truly vulnerable consumers are not protected by these measures, points out the association that brings together most of the most active companies in the oil and gas industry. Among these there are ADX Energy, Amromco, Expert Petroleum, Fora Oil & Gas, Hunt Oil, NIS Petrol, Oilfield Exploration Business Solutions, OMV Petrom, Panfora Oil and Gas (MOL Group), Sand Hill Petroleum Romania, Stratum Energy, Vermilion Energy and Serinius Energy.

ROPEPCA has advocated for the repeal of the provisions of the ordinance applicable to the energy sector since its adoption, constantly demonstrating its negative consequences through expert opinions and an independent impact study. Although in effect for only a few months, the measures imposed by Ordinance 114 have disrupted the functioning of the gas market, led to an artificial increase in the unregulated price and affected the economic viability of oil exploration and production projects.

The association considers that the repeal of the provisions is an obvious and pressing necessity, representing a first step towards returning to normality and the rehabilitation of investor confidence in Romania as a destination for energy projects.

In order for the energy sector to become truly competitive and diversified, functional market mechanisms and measures for the real protection of vulnerable consumers must be integrated. It is also necessary to stimulate the production activity by updating the legislation regarding the unlocking of oil operations, removing bureaucratic barriers and modernizing the data regime.

Currently, in Romania there are over 400 oil fields and over 13,000 active wells. Through the efforts of companies in the sector, more than 90% of Romania’s natural gas consumption is ensured. Significant investments and a stable, predictable and competitive regulatory framework are needed to maintain constant the oil and gas production level.

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