Romanian Govt. ponders 5% preferential VAT rate for energy after April

Romanian residential consumers with monthly consumption of under 300kWh will pay a preferential 5% VAT rate and no co-generation or green certificates after April 1 - when the ‘cap and subsidy’ scheme in force over the winter period expires, prime minister Nicolae Ciuca announced on January 11.

According to prices on the spot market, the phasing off of the ‘cap and subsidy’ program would result in 80% higher prices unless another package of compensations is set in place.

The new set of measures announced by PM Ciuca is weaker than those in force over the winter. Namely, for a “universal service” price of RON 1.37 per kWh charged now in the Bucharest metropolitan area, the households pay RON 0.71 if their monthly consumption is under 300 kWh and RON 1 if they consume more. After April 1, the measures announced by the PM would result in a price of RON 1.11 - but only for the group of households using less than 300kWh per month.

The estimates, compiled by Economica.net, does not price at the rising prices on the spot market.

PM Ciuca announced that the Government ponders a new support scheme for small and medium-sized enterprises (SMEs) and for the natural gas residential consumers.

(Photo source: Inquam Photos/George Calin)