RO Govt. warns natural gas suppliers may be investigated for “dominant position”

Some of the natural gas suppliers use their dominant market position and refuse to reduce the end-user prices despite the lower prices paid for gas, Romania's economy minister Virgil Popescu said.

"We have prepared measures. The Competition Law allows us to intervene in the market when we see that the market is distorted. In my opinion, we are witnessing an abuse of a dominant position of the two big suppliers [E.ON and Engie] that hold over 90% [of the market]. We can intervene together with the competition body," said minister Popescu, quoted by Agerpres.

The suppliers are already buying in advance gas for the rest of the year at lower prices than the regulated price, but they ask roughly the same price from households.

While the regulated price is RON 68 per MWh, the suppliers buy natural gas at a price of just over RON 30 per MWh for the gas delivered during summer and RON 58-60 for the gas delivered during the cold season, according to data provided by minister Popescu.

The end-user prices should decrease by at least 10-15% after July 1, when the natural gas market for household clients will be liberalized, Popescu estimated.

However, only 50% of the residential users are aware of the gas market liberalization, according to a poll.

The Government made available an online instrument that allows comparison between offers made to households by all the suppliers - but it is rather cumbersome and unlikely to help small-sized suppliers gain visibility.

The two major incumbent natural gas suppliers, E.ON and Engie (that also operate most of the distribution networks), dominate the market.

E.ON claims that "there are currently no quantities of gas available on the market at reasonable and long-term prices so that the population's bills will decrease from July 1, but it is not excluded that this will happen in the next period."

Separately from the Liberal Government's call for investigations on the dominant position enjoyed by E.ON and Engie.

Social Democrat MP Iulian Iancu came up with the idea of a "windfall gain tax" on the profits made by the gas suppliers after the market liberalization. He suggested the tax would be charged on the profits obtained by suppliers from buying gas from the free market at lower prices than the regulated price.