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Negotiation could result in 5 to 20% reductions in the price of natural gas for household consumers

12 May 2020

On July 1, the Romanian gas market will be liberalized for the household consumers too, which means they will have to be more informed and better educated in order to understand and negotiate the offers that suppliers will launch in the competitive market. There is an important information asymmetry between supply companies and household consumers that can cause problems, especially since the institutional framework designed to protect consumers and allow the arbitration of possible disputes is only slightly functional, warns Dumitru Chisăliță, president of the Intelligent Energy Association. Negotiating the offers can mean reductions of 5%, up to 20% of the final price of natural gas, anticipated Dumitru Chisăliță, at EnergynomicsTalks, in a conversation further developing the Fair Gas Price Campaign, launched in 2015 by the Association.

The first offers in the competitive market as launched by the power supply operators accredited by the regulatory authority came with prices higher or equal to those in the regulated contracts still in force until the end of June. The calculations made by Dumitru Chisăliță, senior consultant gas and energy markets, show that ” after liberalization Bucharest residents should only accept gas offers with discounts of 5.5 to 21% compared to the current price level”. The main argument is related to the low level of natural gas prices in the wholesale futures markets – about 50 lei per MWh currently on the Romanian Commodity Exchange, significantly lower than in previous months.

Do not rush to accept the first offer from the supplier, urges Dumitru Chisăliță. “I encourage you to ask for a second and for a third gas offer from your suppliers. The price in the June offer can be much lower, if there will be a reaction from consumers to express their dissatisfaction with the prices offered by suppliers”, said the president of the Intelligent Energy Association.

In his opinion, the institutional framework meant to ensure the proper functioning of the liberalized market is unsatisfactory, first of all for the ANRE Order 27/2020 stipulates, in article 4, that if the household customers have not concluded a gas supply contract, [until 30 June 2020], the supply of gas will continue to be made, by the existing supplier, “at the price in the offer communicated to the customer”. “Lazy customers”, due to lack of interest or lack of information, will enter the competitive market from July 1 at the price proposed by the current supplier.

Institutions designed to protect consumers and allow for the arbitration of possible disputes between household customers and supply operators are also missing. Dumitru Chisăliță referred mainly to a ADR – alternative dispute resolution – type entity, as defined by Ordinance 38/2015, which transposes the European Directive 11/2013. The Center for Alternative Dispute Resolution in the Field of Natural Gas (SAL-GAZ) should “urgently conduct an information program and organize courses to prepare household consumers to negotiate their gas contracts on a liberalized market”. At the same time, such an institution could act for “a simple, fast and low-cost out-of-court solution to disputes between consumers and traders”.

The Fair Gas Price Campaign, launched in 2015 by the Intelligent Energy Association for non-household customers that were liberalized on January 1, 2015, continues for household customers that will be liberalized on July 1, 2020, said Dumitru Chisăliță.

EnergynomicsTalks is an editorial product launched by the Energynomics communication platform aiming at encouraging a constant professional dialogue in the Romanian energy community during the state of emergency and amid the restrictions imposed by social distancing approach.

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