May 28, 2023

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Household and industrial consumers could pay a fixed tariff for energy. The plan of the governing coalition

With ever-increasing energy bills and a market troubled by too many changes, Romanian politicians are once again discussing the regulation of current tariffs.

Without announcing directly, the leaders in power would like new legislative changes for fixed prices. Thus, one kilowatt would be 0.68 money for those who consume less than 255 kilowatts each month and approximately one leu for those with a higher consumption.

Mechanisms are needed, which make energy not only available, but also accessible“, also said the president Klaus Iohannis.

The governing coalition is discussing that, from the beginning of next year, household consumers, as well as industrial ones, should pay a fixed tariff for the energy consumed.

Political sources claim that for families with a consumption of less than 255 kwh per month, the price would be 0.68 money, and those with a higher consumption would not pay more than 1 leu. Industrial consumers and companies could pay a maximum of 1.3 lei per kwh.

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While not clearly announcing a return to the pre-liberalisation regulated market, politicians are setting fixed prices at which producers will be forced to sell electricity, without receiving any compensation from the state.

Marcel Ciolacu, PSD president: “We will try to look for an average price, but coming to the vulnerable area, of vulnerable people, to maintain this price of 0.68-0.8. It’s normal for the state to compensate, but it’s not normal to compensate abnormal earnings”.

The head of the PNL would agree with the regulation, although there are liberals who draw attention to the fact that in other countries where similar measures have been taken, shortages have been reached.

5 billion lei was spent by the state for support measures in the field of energy

Nicolae Ciucă, PNL president: “I would better call it semi-regulatory, because we have to somehow stay connected to the free market, certainly here it depends a lot on the gap in which the free market will be kept open. Citizens who consume up to 100 watts still pay 0.68 bani, those up to 255.80 bani, imm 1 leu. We will maintain these costs until we make a decision.”

Five billion lei was spent by the state on support measures in the field of energy, which is why President Klaus Iohannis said that compensation measures should be replaced with better solutions.

Klaus Iohannis, President of Romania: “We have to find mechanisms to survive this dramatic phase of the energy crisis. It is clear that something must be done. The way the market works now, it is quite complicated and expensive for the budget. We cannot continue to subsidize the price of energy for a very long time”.

In the opinion of the state secretary of the Ministry of Energy, Constantin Ștefan, 70% of the market could be regulated, and 30% could remain a free market. The regulated price would also include production costs, but also a limited profit margin of manufacturers and suppliers.

Romania has a total consumption of approximately 55 TWh, according to estimates, and the imported amount is below 5%. Among all categories, the population consumes the most, around 12 TWh.

Manufacturers’ representatives say, however, that a regulation could produce distortions in the market, especially since several changes to the legislation have already been made.

Silvia Vlăsceanu, Association of Electric Energy Producers: “We keep changing and we won’t have time to perfect the one that is at a given moment because another one is already coming that radically changes the operation of the market. We will certainly witness some blockages on the energy market”.

The electricity market has been liberalized since January 1 last year. The return to a regulated market could be applied for the next two years, as a temporary solution to the current crisis, political leaders also say.

Reporters: Ștefana Todică, Iulia Petcu, Gigi Ciuncanu, Roxana Vlădășel

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