In Romania, the government has decided to extend its aid program until the end of August 2023. While this should provide relief to households and small businesses heavily impacted by soaring prices, energy utilities fear a market freeze.
Romania adopts a decree contested by the industry
In Romania, the government has extended a support program until the end of August 2023. It puts in place a cap on gas and electricity bills. It concerns households, small businesses, but also hospitals and schools in the country.
However, this program does not have unanimous support in Romania. In fact, the decree was adopted without public consultation. In addition, it introduces a new tax on the income of producers and traders. In addition, Romania has a cap on electricity purchase prices.
Thus, the Association of Energy Utilities (ACUE) criticizes the extension of this program. According to ACUE, the clearing prices do not take into account the reality of the market. She then explains that suppliers will experience significant losses. Moreover, it would be against Romanian and European law.
ACUE states:
“ACUE is asking that the new changes be revised to avoid a complete market gridlock,” she said in a statement. “The situation is critical and […] has a direct impact on the continuity of supply and distribution services.”
Engie Romanie and OMV Petrom state that they are analyzing the decree in order to assess its financial consequences. However, Eric Stab, CEO of Engie Romanie, comments:
“I am concerned that this executive order will have unintended and unwarranted effects. We are in an extraordinarily complicated situation; it is not easy to take well thought out steps that we are certain will have the desired effect.”
For his part, Alexandru Maximescu, OMV Petrom’s director of public and regulatory affairs, regrets Romania’s decision. He explains that it is “important to consult with the industry” before making such decisions.
