Prime Minister Marcel Ciolacu asked the Minister and the National Energy Regulatory Authority (ANRE) to check whether Romanian suppliers are raising prices in Romania and lowering prices in Europe. We will remind you that HotNews.ro wrote a series of articles about the rise in gas and electricity prices, while in European markets they are falling, and about how the state subsidizes the huge profits of suppliers.

Cholaku: Then these companies go to the state so that we can settle the difference

“I ask the Minister of Energy, Sebastian Burduch, to look carefully at what is happening with the price of gas,” Prime Minister Marcel Čolaku said on Friday at the start of a government meeting.

He also talked about how the state regulates the price difference

“I have seen that there have been situations where suppliers have unnecessarily increased prices, because they have decreased across Europe. It is true that these increases are not reflected in the population’s bills, where there are ceilings. But these companies then come to the state so that we compensate the difference in comparison with a limited price. So I request you to check the situation and I hope ANRE will also inform,” said Cholaku.

The situation, in short, in Romania

Regardless of what happens on the European markets, how much gas and electricity prices fall, the Romanian authorities want to maintain the compensation cap scheme until the spring of 2025. The government has no intention of conducting a price analysis, even if it did. To date, the capped compensation scheme has proven to be harmful, despite the many legislative changes it has undergone.

Suppliers, especially through trading activities, have made huge profits in 2022, the state has poured many billions of lei into them, there is no price signal in the market, the next years are surrounded by complete uncertainty, and consumers do not benefit from the lowest prices, as for example in Hungary and Bulgaria. Vice versa. As far as contract prices are concerned, Romania is one of the highest in the EU, and with limited ones – somewhere in the middle of the ranking.

So far, the state has paid out 22.4 billion lei to suppliers, and by 2025 there will be many more billions.

The current cap level in Romania was set on GEO 27/2022, when electricity and natural gas prices were very high. At the same time, prices on European markets fell sharply – three times for electricity and 90% for gas. In Romania, it is unclear how justified the current restrictions are in Romania, and it is difficult to analyze this aspect in the absence of a free market and price signals.

In Romania, the price of gas is not free, the restriction starts with the producers. They are obliged to sell at a price of 150 lei/MWh. This is the purchase price, plus shipping, distribution and supplier markups. For the final household consumer, the price is limited to 0.31 lei/kWh, which means 310 lei/MWh, and for non-household consumers – 0.37 lei/kWh (370 lei/MWh), for the annual consumption of no more than 50,000 MWh.

Photo source: Artur Widak/NurPhoto/Shutterstock Editorial/Profimedia

Other articles on high gas and electricity prices:

• Why energy prices on the spot market in Romania are higher than in the West / Explained by suppliers
• Winter began with low gas prices on European markets / In Romania, prices are blocked by ceilings
• The response of the Ministry of Energy is full of contradictions, with which it protects the huge profits of energy suppliers: Companies complain that they did not receive subsidies worth billions of lei from the state on time
• Who are the businessmen and companies that benefited from the energy crisis in Romania / The supplier had a turnover of 18,346% and a profit of 3,298%
• What are the reasons why Romania has one of the highest electricity and gas prices in the EU / Explanation of the Ministry of Energy: Not only in Romania, companies have taken advantage
• Energy ceilings hide unreasonably high prices in the producer-supplier chain / What is checked on the market