​The Intelligent Energy Association compared invoices issued by the same gas supplier for the same point of consumption in October 2022 and October 2023 to see the prices in the contract and the prices actually paid by the customer. He noted that the actual price paid by the consumer, limited to 0.31 lei/kWh, decreased by 5.3%. But at the same time, the price of gas in the contract increased by 4.8%, which is twice the price actually paid. We remind you that the difference in price is covered by the state through the compensation scheme.

The supplier took advantage of the law and the inattention of customers

Why did the supplier, taking advantage of the legislation and the client’s inattention, increase the price of gas in the contract by 4.8%?” asks the “Intellectual Energy” Association in its analysis.

According to the Intelligent Energy Association, at the time of setting the contract price of 0.55475 lei/kWh without VAT, the price of natural gas on the international gas market was EUR 136.59/MWh (TTF quote – August 1, 2022).

In 2023, when the supplier set a price 4.8% higher than the previous year, the price of natural gas on the international gas market was EUR 49.85/MWh (TTF quote on August 1, 2022) – i.e. a price of 2 .74 times less.

A comparison of the data shows that the price in the contract is twice the price paid.

Why did the contract prices increase when the international markets decreased?

According to the Intelligent Energy Association, the answer to this question is complex. The reasons may be:

• the only partial suspension of the free gas market GEO 27/2022 led to the fact that one party (the consumer, not well informed, believed that the prices were regulated), the other party (the supplier, very well informed, set the prices according to the principles of the free market and the use of Romanian legislation to its entry into the contract)
• Romanian legislation allows unilateral pricing in the contract. I believe this mechanism is useful in an established market, not in a situation where I have consumers who are not well educated about the benefits and risks of a free market.
• lack of appropriate activity of the 3 main subjects of the free market, without which the free market actually does not work – consumer protection, guarantee of competition and market arbitrator (ANRE)
• lack of an alternative dispute resolution entity on the gas market.

The Intelligent Energy Association says that EUROSTAT recently presented that the price in the first half of 2023 compared to the same period in 2022 increased by 77% for electricity (3rd place in Europe) and by 134% for natural gas (2nd place in Europe). .

Natural gas, electricity and heat prices in October 2023 were 3.6% lower than in October 2022, INS data showed.

Low gas prices on European markets

With the beginning of the calendar winter, the price of gas on the European markets is falling. Natural gas futures for January delivery fell below €40/MWh to €37-38/MWh, unchanged from earlier, according to data from the TTF gas hub in Amsterdam, where reference prices are set at the European level. and at the beginning of October. Analysts say that these falls indicate high market confidence in a comfortable winter crossing.

The level of gas storage is still very high at 94% of capacity, which is significantly higher than expected, considering that at the beginning of November, EU countries were expecting a level of storage filling of 90%.

In addition, prices are also affected by the large number of liquefied natural gas supplies, according to Bloomberg. Imports of liquefied natural gas into Western Europe rose last month to their highest level since May, and the early days of December suggest that strong supply will continue into the future.

The price remains limited, as it was established during the crisis

In Romania, the price of gas is not free, it is capped from producers until spring 2025 under legislation passed last year, when prices rose to record levels. 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.

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. So far, the state has paid out more than 22.4 billion lei for compensation to suppliers.

Suppliers, especially through trading activities, have made huge profits in 2022, the government 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 it happens in Hungary and Bulgaria, for example. Vice versa.

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