Romania's Govt. looks for solutions to tackle rising energy prices

The Government won’t intervene to cap the energy price, and Romania needs energy independence, prime minister Florin Citu said on Tuesday, August 31, during a meeting dedicated to the recent increases in domestic energy prices. He added that the Government would take the “toughest measures” if it discovers that the inefficiency of state-owned energy producers causes the higher energy prices paid by Romanian end consumers.

Energy prices have become a hot topic in Romania after the electricity price went up 25%, and gas prices increased by 20% from July 2020 until July 2021, according to official statistics. Further price increases are expected over the winter as Romania’s domestic electricity and gas production doesn’t currently cover the consumption.

“I can tell you right away that we will not intervene to cap prices. Just to be very clear,” Florin Citu said, quoted by News.ro. He added: “At our previous meeting, I understood the major problem we are facing now - rising prices everywhere in the European Union. At the same time, I understood that we have another problem: we have to import energy because we don’t produce enough to cover our needs. It’s clear that Romania needs energy independence.”

At the same meeting, energy minister Virgil Popescu announced that the Government would also start compensating the higher energy bills for Romanians with average income and average energy consumption beginning November 1.

“In addition to compensating vulnerable consumers, we want to compensate consumers with average income or average consumption. We want to fully compensate them this winter, which begins on November 1 and ends on March 31,” Popescu said, quoted by Agerpres.

He said that there are 4.5 million households in Romania that consume up to 1,000 kWh per year, which means over 10 million Romanians.

The minister said that this compensation would be made regardless of the vote on the Vulnerable Consumer Law. This bill should create the framework under which the state can help vulnerable energy consumers.

Minister Virgil Popescu said the funds to compensate vulnerable and average consumers would come from the tax paid by gas producers for their extra gains from the gas market liberalization and from the dividends received by the Government from the state-owned energy companies such as Hidroelectrica, the country’s biggest electricity producer.