RO lawmakers approve ‘cap and subsidy’ bill for energy prices

Romania’s Chamber of Deputies as decision-making chamber on October 27 approved the bill that caps the energy prices for households and several social institutions for a period of five months, Profit.ro reported.

For residential consumers, within a limit of 1,500 kWh electricity (+10%) and 10,600 kWh (+10%) natural gas over the five-month period (November 2021 to March 2022), the Government will pay subsidies as well.

The electricity price is thus capped at RON 1 per kWh, and a subsidy of up to RON 0.29 is being paid (to consumers not exceeding the threshold) - with the final end-user energy price (all taxes included) not to exceed RON 0.71 per kWh.

For the natural gas, the Government caps the price at RON 370 per MWh (of which RON 250 per MWh is the price of the gas without taxes) and will pay up to 33% subsidy based on a benchmark price of RON 125 per MWh (not including taxes, such as storage fee, VAT, excise tax).

As in the case of electricity, the subsidy will be reduced in case the end-user natural gas price after the 33% discount drops below RON 125 per MWh - such as to keep the end-user price at RON 125 per MWh.

For hospitals, schools, nurseries, NGOs, social service providers and places of worship, there will be no subsidies, but the prices will be capped at the same levels.

Small enterprises and freelancers will be waived some taxes. For central heating systems, the price of natural gas purchased by the power plants that produce thermal energy for central heating systems such as the one operated by Termoenergetica in Bucharest will not be capped.

Instead, the Government will finance the town halls from the state budget so that they can grant subsidies to control the final price of the Gcal per population, in the conditions of the rising price of gas purchased by the power plants.

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