Romania’s ruling coalition on January 17 agreed to increase the intensity of the support extended by the Government to households for their electricity and natural gas consumption over the February-March period.

The amendments will be enacted through a Government emergency ordinance (OUG).

A supplementary budget of RON 3 bln (EUR 600 mln) was earmarked for the two months. The subsidies are at least partly financed from a special tax levied on power producers’ windfall earnings generated by the sudden rise in prices.

Furthermore, the authorities will take steps to ensure that the invoices sent by suppliers for the period since November, in breach of the regulations, will be rewritten, prime minister Nicolae Ciuca announced, G4media.ro reported.

The cap and subsidy support schema enforced as of November 1 will be maintained, but the parameters will be revised. Thus, the maximum electricity price charged by suppliers is capped over the two-month period at RON 0.8 per kWh (instead of RON 1 in November-January).

The households with a monthly consumption of under 500kWh (compared to 300kWh) will qualify for subsidies such as to pay a final price of RON 0.68 per kWh (compared to RON 0.68-0.71 previously).

Although the subsidized price has not decreased significantly, the subsidy will be available to more households after the monthly consumption limit was increased from 330kWh to 500kWh.

The electricity price paid by small and medium-sized enterprises was capped at RON 1 per kWh.

For the natural gas, a similar adjustment was operated: the price will be capped at RON 0.31 per kWh (from RON 0.37), and the limit for household consumption was increased from 1,000kWh to 1,500kWh (in view of receiving subsidies).

The intensity of the subsidy was increased from 33% to 40% so that the final price paid by households with a monthly consumption under the ceiling will be RON 0.22 per kWh.

The ruling coalition abandoned the Social Democrat’s idea of reducing the VAT for electricity and gas from 19% to 5%. Also, the Government will not regulate the price of electricity and natural gas.

(Photo: Aitor Munoz Munoz/ Dreamstime)

andrei@romania-insider.com