Energy Minister Sebastian Burduha says he also wants to keep the cap/compensation scheme, pointing out that there are suppliers who bill below the cap. “And within the ceiling of 0.31 lei/kWh, we see that there are suppliers who bill below the ceiling, including in my account, depending on the commercial policy of each supplier. It’s a free market, Romanians who feel wronged can change their supplier,” Burduia said.

Asked on Thursday what measures he had taken after Prime Minister Çolaku asked him to check why gas prices were rising, Energy Minister Sebastien Bourduya said ANRE was carrying out more than 170 control measures and by the end of this year the results of those actions must be declared actions.

On the other hand, Burduja defended the current compensatory cap scheme, which he believes has brought stability.

• “And within 0.31 lei/kWh, we see that there are suppliers who bill below the ceiling. Including in my account 0.26, 0.28, 0.24 depending on the commercial policy of each supplier. It is a free market, Romanians who feel wronged can change their supplier.
• Therefore, we do not expect a significant increase in the price of gas, warehouses are still at a significant degree of filling, and we will certainly strive to provide this predictability for the end consumer, because we are in the conditions of two wars, a changing conetxt.
• The cap/compensation scheme has achieved these two goals: it has kept prices stable for Romanians and Romanian companies, and it has also kept suppliers stable because every time the scheme intervenes, they change all their IT billing systems to calculate payment amounts and this creates errors and costs to suppliers who already have significant costs to cover the difference between the price on the bill and the price at which they purchase electricity and natural gas. So we want to keep the scheme as it is,” said Sebastien Bourduilla.

Cholaku asked Burduzha to check why gas prices are rising

On December 8, Prime Minister Marcel Ciolacu asked Energy Minister Sebastian Burduzi and the National Energy Regulatory Authority (ANRE) to investigate Romanian suppliers who are raising prices in Romania while prices are falling in Europe.

As a reminder, HotNews.ro exclusively wrote a series of articles about the rise in gas and electricity prices, while they are falling on European markets, and about how the state subsidizes the huge profits of suppliers.

“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 not done any price analysis, although the compensation cap scheme has so far proved harmful despite the many legislative changes it has gone through.

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 capped at 0.31 lei/kWh, which means 310 lei/MWh, and for non-household consumers – 0.37 lei/kWh (370 lei/MWh), per year 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