RO Govt. to “help” natural gas prices decrease, if free market fails

The price of the natural gas paid by households should fall by 10-15% from July 1, as an effect of the Gas Release Program and market liberalization, the minister of economy and energy, Virgil Popescu, said for Digi24 TV station, quoted by Economica.net.

Otherwise, “the Government will use the competition legislation to intervene,” minister Popescu warned.

The large gas suppliers (E.ON and Engie), which control some 90% of the market, seem to have reached an anti-competitive agreement (colluded) and have not announced lower end-user prices for households, according to the official.

However, they are expected to pay significantly lower prices for the gas bought from local producers.

The Gas Release Program specifies that large-sized local producers (OMV Petrom and Romgaz) should sell 30% of their production in auctions on local, open and structured markets.

The starting prices are based on the prices at the Central European Gas Hub AG in Austria (significantly lower than the current regulated prices in Romania).

The Programme is set to apply between June 1, 2020, and December 31, 2022 (with delivery starting on July 1, 2020).

Nonetheless, the major gas suppliers - which are part of the same groups with the gas distribution firms after the unbundling procedures, have not made better offers to households so far.

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