Radio România Internațional

Tag: capping

February 27, 2025 UPDATE

ENERGY The Romanian government passed an emergency order to extend the cap on electricity prices beyond the 31st of March deadline, until 30th June this year, and the one on natural gas prices until the beginning of April next year. The latter move is intended to prevent a rise in natural gas prices when the stocks for next winter are refilled. The energy minister Sebastian Burduja said recently that the government wishes to protect Romanian households and support the competitiveness of Romanian businesses. After the energy market was deregulated in January 2021, Romania was one of the European countries the worst hit by soaring electricity and gas prices.

DEFICIT Romania’s budget deficit reached 0.58% of GDP in January, as against 0.45% in the same month last year, according to data made public by the finance ministry on Thursday. The institution said total revenues amounted to almost RON 47 billion, down 1.4%, amid lower EU funding and some current returns, such as VAT and excise duties. Expenditure, on the other hand, which amounts to RON 58 billion, went up by 4.5% compared to the corresponding period last year. The finance ministry mentions that this year’s state budget is based on an economic growth rate of 2.5% and a budget deficit of 7% of GDP. In 2024, the deficit went up to 8.65% of GDP, from 5.61% in 2023.

FARMERS Romanian farmers stand in solidarity with their counterparts in Czechia, Slovakia, Hungary and Austria, who are staging protests against EU agricultural policies, which they see as unfair, and against massive imports of agricultural products from third countries. The Alliance for Agriculture and Cooperation, which includes a number of Romanian organisations in the field, said in a statement that Romanian farmers are faced with market distortions caused by duty free imports from Ukraine, the negative impact of the EU-Mercosur trade agreement on the competitiveness of European agricultural production, and by a growing bureaucratic burden caused by EU regulations. All of these pose a threat to food security, destroy local supply chains and affect farmers’ incomes, the Alliance says. Its representatives view the protests as a strong signal that the current agricultural policies must be revised in order to ensure a sustainable future for farmers across the European Union.

INVESTIGATION Călin Georgescu, the far-right front-runner in the cancelled presidential elections in Romania, is under criminal investigation for 60 days, after being questioned by the General Prosecutor’s Office on Wednesday. While inquiries are being conducted, he is not allowed to leave the country and must check in with the police regularly. Georgescu is accused of six offences, some in aggravated form, including instigation to actions against the rule of law and presenting false information and giving false statements in respect of his wealth declaration and the funding of his election campaign.

TATE BROTHERS The Romanian body investigating organised crime and terrorism confirmed that the case prosecutor allowed Andrew and Tristan Tate to leave Romania, but emphasised that the brothers are still under criminal investigation and must return to Romania. The two, who are holding dual British-American citizenship, are believed to have left the country on Thursday morning on board a private plane, heading for Florida. They were first arrested three years ago and are charged with rape, kidnapping and money laundering. Last week, the Financial Times wrote that the current administration in Washington is putting pressure on Romania to cancel the restrictions against the Tate brothers, which the Romanian authorities have denied.

TARIFFS The tariffs the US could introduce on trade with the European Union would have less impact on Romania, as the country’s main trade partners are EU member states, said the National Bank chief economist Valentin Lazea. He added that 72% of Romania’s foreign trade is with EU states and mentioned the example of tariffs applied in the past on steel and aluminium, which did not affect Romania much, given that exports of these metals to the US are negligible. Lazea warned however that there will be an inflationary effect of the global increase in tariffs, which will push prices up. The US President Donald Trump announced on Wednesday, in the first meeting of his cabinet at the White House, that he will soon levy 25% customs duties on European products imported into the United States. (AMP)

27 February 2025
February 22, 2025 UPDATE

ELECTIONS The Central Electoral Bureau of Romania announced that it decided on Saturday to admit the registration of the Protocol on the establishment of the electoral alliance “Romania Forward”, signed by the Social Democratic Party (PSD), the National Liberal Party (PNL) and the Democratic Union of Ethnic Hungarians in Romania (UDMR), in the ruling coalition, in order to support Crin Antonescu’s candidacy in the presidential elections. Antonescu is also backed by the group of ethnic minorities in the Romanian Parliament. The Central Electoral Bureau for the election of the president of Romania in May was selected on Friday. The Bureau is made up of 5 judges with the High Court of Cassation and Justice, the president and vice-presidents of the Permanent Electoral Authority and one representative of each party in Parliament. Parties, political or electoral alliances, ethnic minority organisations and independent candidates will be able to submit their candidacies by March 15, after which the Central Electoral Bureau is to rule on their validity. The election campaign begins on April 4 and ends on May 3, with the vote scheduled on May 4 and the second round on May 18. In December the Constitutional Court cancelled the presidential election over foreign interference in the electoral process. Thousands of Romanians, supporters of the independent sovereigntist candidate Călin Georgescu, who came out first in the first election round in December, took to the streets again in Bucharest on Saturday to demand that the elections be resumed with the second round.

MIDDLE EAST Romania’s interim president Ilie Bolojan said on Saturday that Romania welcomes the release of the 6 Israeli hostages held captive in Gaza, one of whom has dual, Israeli and Romanian citizenship. “We take this opportunity to reiterate our support for implementing the ceasefire agreement and releasing the hostages, as well as for the urgent provision of humanitarian aid to the population of Gaza,” president Bolojan posted on social media. He also mentioned that Romania thanks the US, Qatar, Israel and Egypt for the efforts made to free the hostages. On Saturday, Hamas handed over the last 6 hostages in a first phase of the ceasefire agreement with Israel in Gaza, which provided for the release of a total of 33 captives. Hamas, in turn, receives over 700 Palestinian prisoners from Israel.

RATING Fitch has sent a clear signal that Romania must carry on its fiscal consolidation measures and restore budgetary balance, in order to improve its fiscal credibility, the finance minister Tanczos Barna said after the international financial rating agency announced on Friday that it is keeping Romania in the investment grade category. In a statement, the agency confirmed Romania’s long-term rating at ‘BBB minus’, with a negative outlook. According to Fitch, the rating relies on the country’s EU membership and capital inflows that contribute to public revenues and macro-stability. The gross domestic product per capita and the governance and human development indicators are also higher than in countries in the same rating category, the agency explains. These strengths are overshadowed, however, by a significant deterioration of public finances and a sharp slowdown in economic growth in 2024. Adding to this is a possible adverse effect of political uncertainty. In December last year, Fitch announced that it had downgraded the outlook assigned to Romania from stable to negative. The same announcement came later from Standard & Poor’s.

ENERGY Electricity and natural gas tariffs could be offset in Romania even after April 1, when the current aid scheme is set to expire. The energy ministry has posted for public review a draft act extending the capping period, under which the scheme for electricity is extended until July 1, and for natural gas by one year, until April 1, 2026. The capping extension proposal comes as prices on European electricity and gas exchanges have increased significantly, and also as the low temperatures in Romania this winter entailed a significant increase in consumption. As a result, the line minister Sebastian Burduja announced that the government had decided to protect Romanians and support the competitiveness of Romanian companies. After the energy market was deregulated on January 1, 2021, Romania was among the European countries the most severely affected by record-high electricity and natural gas prices. Thanks to the government’s price capping decisions, households and businesses were protected from excessive prices.

GERMANY Germany holds federal elections on Sunday that are crucial to the country’s future, as the far-right is on the rise and the economy is heading for a third year of recession. The vote comes after the coalition of the Social Democrats, Liberals and Greens led by the Social Democratic Chancellor Olaf Scholz collapsed late last year. According to polls, the Conservatives are expected to win. With the far-right in second place in the polls, however, analysts say that in order to govern, the Conservatives will have to reach a compromise with the Social Democrats or the Greens, overcoming their differences.

AIRCRAFT US aircraft deployed at the Mihail Kogălniceanu base (southeastern Romania) are performing low-altitude training flights in and around Constanţa County these days, the Romanian Air Forces announced. They say that the exercises will continue until February 28 and promised that all safety measures have been taken to reduce the noise impact on civilians. Officials say that these trainings aim to increase the response capacity of aeronautical personnel.

CORRUPTION A company and 2 individuals are prosecuted in a case handled by the Romanian National Anticorruption Directorate (DNA), together with investigators from the US Department of Defence, the DNA announced today. The company owned by a Greek national has allegedly bribed a foreign official to get a EUR 9 mln contract to refuel aircraft at the NATO military base in Mihail Kogălniceanu. Two other individuals are suspected of complicity in continuing bribery in connection with an official of a foreign country.

HANDBALL CS Minaur Baia Mare qualified for the quarterfinals of the men’s handball competition EHF European Cup, although they were defeated by the Finnish team BK-46, 32-31, on Saturday, in Karis, in the second leg of the round of 16. Minaur also played the first match in Finland, on Friday, winning 33-30. Last season, Minaur Baia Mare reached the semifinals of the European Cup. (AMP)

22 February 2025
February 22, 2025

ELECTIONS The Central Electoral Bureau for the election of the president of Romania in May was selected on Friday. The Bureau is made up of 5 judges with the High Court of Cassation and Justice, the president and vice-presidents of the Permanent Electoral Authority and one representative of each party in Parliament. Parties, political or electoral alliances, ethnic minority organisations and independent candidates will be able to submit their candidacies by March 15, after which the Central Electoral Bureau is to rule on their validity. Thousands of Romanians, supporters of the independent sovereigntist Călin Georgescu, who came out first in the first election round in December, took to the streets again in Bucharest today to demand that the electoral process be resumed from where it was canceled. The billionaire Elon Musk, an advisor to the US president Donald Trump, Friday night posted a critical message on his social network X (the third this week) about the cancellation of the December elections. The US vice-president J.D. Vance had also previously questioned the cancellation of the elections. Romania’s Prime Minister Marcel Ciolacu said Bucharest would try to provide clarifications about the situation through all diplomatic channels.

RATING Fitch has sent a clear signal that Romania must carry on its fiscal consolidation measures and restore budgetary balance, in order to improve its fiscal credibility, said finance minister Tanczos Barna after the international financial rating agency announced on Friday that it is keeping Romania in the investment grade category. In a statement, the agency confirmed Romania’s long-term rating at ‘BBB minus’, with a negative outlook. According to Fitch, the rating relies on the country’s EU membership and capital inflows that contribute to public revenues and macro-stability. The gross domestic product per capita and the governance and human development indicators are also higher than in countries in the same rating category, the agency explains. These strengths are overshadowed, however, by a significant deterioration of public finances and a sharp slowdown in economic growth in 2024. Adding to this is a possible adverse effect of political uncertainty. In December last year, Fitch announced that it had downgraded the outlook assigned to Romania from stable to negative. The same announcement came later from Standard & Poor’s.

ENERGY Electricity and natural gas tariffs could be offset in Romania even after April 1, when the current aid scheme is set to expire. The energy ministry has posted for public review a draft act extending the capping period, under which the scheme for electricity is extended until July 1, and for natural gas by one year, until April 1, 2026. The capping extension proposal comes as prices on European electricity and gas exchanges have increased significantly, and also as the low temperatures in Romania this winter entailed a significant increase in consumption. As a result, the line minister Sebastian Burduja announced that the government had decided to protect Romanians and support the competitiveness of Romanian companies. After the energy market was deregulated on January 1, 2021, Romania was among the European countries the most severely affected by record-high electricity and natural gas prices. Thanks to the government’s price capping decisions, households and businesses were protected from excessive prices.

CORRUPTION A company and 2 individuals are prosecuted in a case handled by the Romanian National Anticorruption Directorate (DNA), together with investigators from the US Department of Defence, the DNA announced today. The company owned by a Greek national has allegedly bribed a foreign official to get a EUR 9 mln contract to refuel aircraft at the NATO military base in Mihail Kogălniceanu. Two other individuals are suspected of complicity in continuing bribery in connection with an official of a foreign country.

GERMANY Germany holds federal elections on Sunday that are crucial to the country’s future, as the far-right is on the rise and the economy is heading for a third year of recession. The vote comes after the coalition of the Social Democrats, Liberals and Greens led by the Social Democratic Chancellor Olaf Scholz collapsed late last year. According to polls, the Conservatives are expected to win. With the far-right in second place in the polls, however, analysts say that in order to govern, the Conservatives will have to reach a compromise with the Social Democrats or the Greens, overcoming their differences.

FOOTBALL The Romanian football champions FCSB will face the French team Olympique Lyon in the Europa League round of 16, according to Friday’s draw in Nyon, Switzerland. FCSB will play the first leg at home on March 6, with the return leg scheduled on March 13. FCSB qualified for the round of 16 of the Europa League after outplaying the Greek team PAOK Thessaloniki, coached by the Romanian Răzvan Lucescu. The aggregate score was 4-1, with the Romanians defeating the Greeks 2-1 in the first leg, and 2-0 in Bucharest on Thursday evening. (AMP)

22 February 2025
March 19, 2024 UPDATE

Elections – The ruling coalition in Romania made up of PSD-PNL will have a common candidate for the General Mayor of Bucharest in the local elections on June 9, namely the physician Cătălin Cîrstoiu, the current manager of the University Hospital. He will be presented by the leaders of the two parties in a joint press conference. Regarding the candidates for Bucharest’s sectors, they will be announced after the proposals from PSD and PNL will be validated by the leaderships of the two parties. At the same time, the governing coalition should also finalize, this week, the common list of candidates for the European Parliament, which will also take place on June 9. On the other hand, the United Right Alliance, made by Save Romania Union – USR, the People’s Movement Party – PMP and the Force of the Right Party will be on the ballots at the June 9 elections. On Tuesday, the High Court of Cassation and Justice annulled the decision of the Central Electoral Bureau by which it had rejected its establishment protocol. We remind you that this year, besides local and European Parliament elections, parliamentary and presidential elections will also take place in Romania.

Car scrapping – A new car scrapping scheme got under way in Romania on Tuesday, available to those wishing to buy new, more environmental-friendly cars. People can receive up to 1,400 Euros for scrapping a used car and 2,000 euros for two used cars, according to the basic version of the scheme. Under the so-called ‘plus’ version, individual persons can buy cars with a lower pollution level to the amount of 60,000 Euros including VAT, with eco-bonuses and an eco-ticket to be potentially added to the scrapping bonus. The budget allocated for the basic version of the scheme is 60 million Euros, while that for the ‘plus’ version is 200 million Euros, according to the Environment Fund Administration.

Evacuation – Another 11 Romanian citizens and family members were evacuated from the Gaza Strip and arrived in Egypt, said the foreign ministry in Bucharest on Monday evening. A Romanian embassy mobile consular team took them over and accompanied them to Cairo, from where they will fly to Romania. So far, 313 Romanian citizens and family members have been evacuated from Gaza. The Romanian foreign ministry says it is in constant contact with the Israeli and Egyptian authorities to facilitate the evacuation of other Romanian nationals and family members should there be requests to this end and depending on the developments on the ground and the agreement of the parties involved.

Capping – The capping of the trade markup to basic foods will be extended until the end of the year, according to a bill adopted on Tuesday by the Romanian Chamber of Deputies, as a decision-making body. It is a law that complements the legislation in force and which was supported by the parliamentary groups of the Social Democratic Party – PSD, National Liberal Party – PNL and the Alliance for the Union of Romanians – AUR. PSD (in the governing coalition) says that the decision to extend this measure was taken following the large number of requests from citizens, while the opposition Save Romania Union says that the measure is populist and has proven ineffective. The law also provides for the establishment of a mechanism for monitoring the prices of agricultural and food products.

Law – Romania’s Constitutional Court rejected the notification submitted by Save Romania Union – USR and the Force of the Right (both in opposition) against the draft law decriminalizing tax evasion with the damage below one million Euros, if the amount is fully returned, the damage being increased by 15%, plus interest and penalties. The Court claims that the law is an important step for the transition “toward modern theories” of criminal law, in which the main objective must be aimed at the discovery and confiscation of illicit assets. The appellants argued that the law is an invitation to theft made by the ruling coalition made up of the Social Democratic Party and the National Liberal Party. (LS)

19 March 2024
The price of energy, capped again

The Bucharest government has decided that energy prices will be capped this winter as well, as it was the case last season. Meanwhile, the Ministry of Energy must prepare, as soon as possible, the program for the cold season and present it to the government. Prime Minister Marcel Ciolacu has asked the relevant ministries to prepare the energy program for the winter, both for the population and for companies, and to present it to the executive

Government Spokesperson, Mihai Constantin:

Prime Minister Marcel Ciolacu has asked the ministries to prepare the provision of energy in the cold season for the population and for economic production. Also, today an emergency ordinance was approved which ensures the settlement of some payments for energy suppliers, so that the system will continue to be perfectly functional, with capped prices for citizens, as it is today.

Two years ago, energy prices began to rise spectacularly, worldwide, affecting both domestic and non-domestic consumers. The growth started following the COVID-19 pandemic and growing international demand. In 2022, Russia’s war against Ukraine and its unilateral decision to suspend gas supplies to some EU member states deepened the crisis, leading to record highs in energy prices. However, there are signs of stabilization this year, partly due to the policies and interventions of EU governments.After international prices fell, this trend is also observed in terms of electricity production.

In this context, the European Commission and the World Bank have recommended that Romania give up capping energy prices, in order to balance public finances and comply with fiscal rules in 2024. In the country, electricity and natural gas prices have been capped since November 1 2021, due to the liberalization of the line market starting July 1, the same year.Those who benefited most from this capping were those with low consumption. Thus, currently, for electricity, there are ceilings of 68 bani (about 13 eurocents) and 80 bani (about 16 eurocents) per kilowatt hour for low (0-100 kWh) and medium consumption (100-255kWh) respectively. Those who consume more, that is over 300 kilowatt hours, benefit from a capped price of 1.3 lei (26 euro cents).

Also, small and medium-sized enterprises, the food and pharmaceutical industry, community services and places of worship pay 1 leu per kWh (about 20 eurocents). Regarding the price of natural gas, it remains the same as before – household customers pay 31 bani (about 6 eurocents) per kilowatt-hour, and non-household customers pay 37 bani (about 7 eurocents). (MI)

11 August 2023
Government caps third-party motor insurance prices

The Romanian finance ministry made public a draft resolution capping and freezing the price of third-party liability insurance policies for 6 months. This is the temporary solution identified by the Financial Supervisory Authority (ASF), after withdrawing the license of Euroins, an insurer that held one-third of the countrys relevant market.

The decision was made in order to protect car owners from skyrocketing prices, in an attempt to avoid a crisis similar to the one witnessed 2 years ago, when another company, City Insurance, also a market leader at the time, ended up in the same situation.

The finance minister Adrian Câciu: “There will be a government resolution in this respect and I expect it to be passed next week at the latest. This resolution aims at protecting consumers temporarily, enabling the ASF to come up with an action plan so that at the end of this intervention the market may function to the benefit of consumers.”

The resolution on freezing the price of compulsory vehicle insurance policies will take effect 5 days after its publication in the Official Journal. Specifically, insurance companies will be bound to keep policy prices at the level reported for March 1, 2022, provided that level is below the current one, in which case the lower price will apply.

The explanatory memorandum to the draft government resolution includes data illustrating the disrupting impact of the previous incident on the market. In 2022, prices for individual consumers went up by an average one-third compared to the previous year. But if we compare the average figures for February 2023 with the first half of 2021, i.e. before City Insurance lost its license, prices went up 98%.

The head of the Competition Council, Bogdan Chiriţoiu, warns however that during the 6 months when the capping applies, measures must be taken to ensure the third-party liability insurance market functions properly. In his opinion, there are well-known flaws in the relevant legislation, which need addressing, but tackling them requires courage.

One of these is that the insurer has to cover the costs of repair works regardless of the prices charged by automobile repair shops. Another is that current regulations fail to set reference levels for the elements on which policy prices are based.

Bogdan Chiriţoiu also said that the Competition Council has issued the largest number of fines against insurance companies, most recently in December, and that all the companies selling third-party liability insurance policies have been fined a combined EUR 20 mln. (AMP)

23 March 2023
The EU is consuming less natural gas

The natural gas consumption in the European Union decreased by more than 20% in August, September, October and November this year, compared to the average for the same period from 2017 to 2021, shows data published by the Statistical Office of the European Union (Eurostat). Natural gas consumption has decreased in most Member States, but differently. In 18 countries, gas consumption fell by more than the target of 15%, in some countries even by more than 40%. The most significant decline was registered in Finland (almost 53%), Latvia and Lithuania. Luxembourg, the Netherlands, Romania and Estonia reported decreases of over 30%. Six EU members, even if they have reduced their consumption, have not yet reached the 15% target.

Moreover, natural gas consumption increased in Malta and Slovakia. The objective is a 15% reduction of gas consumption between August 2022 and March 2023, compared to the similar average of the last five consecutive years, in order to stop the dependence of the EU bloc on fossil fuels from Russia and to stop feeding with money Kremlins war industry. Between January and July 2022, natural gas consumption in the European Union varied between 1,938 petajoules (PJ) in January, a colder month, and 785 PJ in July, indicating an overall monthly decline even before the 15% reduction target was set. August was the month with the lowest consumption: 708 PJ, compared to the 823 PJ average for the period 2017-2021.

On the other hand, the European energy ministers reached an agreement on Monday on capping the price of natural gas, after several weeks of discussions on a package of emergency measures that have created divisions among member states, in an attempt to respond to the energy crisis. According to documents accessed by Reuters, it was agreed that the capping will be triggered when the quotes at the gas hub in Amsterdam reach 180 Euros per Megawatt-hour (MWh) for three days. The same document shows that the capping could be triggered starting from February 15, 2023 and, initially, it will not apply to ‘over the counter’ type transactions (outside the market).

The European Commission on Tuesday held a round table involving the participation of high-level industry representatives to support activity within the EU Energy Platform towards joint gas procurement, which is scheduled to start in 2023. Attending were representatives of 33 companies from the member states and the contracting parties to the Energy Community. The objective of the Platform is to contribute to the coordination of gas purchases, while using the EU’s negotiating and political power to ensure the supply of energy from reliable partners at sustainable prices for the EU citizens and businesses. (LS)

21 December 2022
November 5, 2022 UPDATE

WAR Iran has for the first time
admitted to have delivered drones to Moscow, but added that happened before the
war in Ukraine, Reuters and AFP report. Russia later used those drones in the
conflict against power plants and other elements of civilian infrastructure.
Iranian Foreign Minister Hossein Amir-Abdollahian has denied that Teheran
continues to supply drones to Moscow adding that Iran is not going to remain
indifferent to the issue if proved that Moscow had used those drones in the
war. Kyiv claims that Moscow has already used about 400 Iranian drones against
its population and that Moscow had ordered roughly 2,000. In response the EU
has announced fresh sanctions against Teheran. In September, Kyiv decided to
reduce its diplomatic relations with Teheran because of its alleged arms
deliveries to its enemy.

RUGBY Romania’s national rugby side won
their test game against Chile 30-23 in Bucharest on Saturday. This has been the
first match played by ‘the Oaks’ in a series of three scheduled this autumn.
Their next test-match will be on November 13th against Uruguay in
Bucharest. The Oaks are also to take on Samoa also in Bucharest on November 19th.

THEATRE Romania will be hosting its
National Theatre Festival over the 5th and 13th of
November with in-person attendance after two years of pandemic, when the event was
held online. Over 60 performances have been made available by state-owned and
private theatre companies from Romania and abroad. The motto of the festival’s
edition this year is ‘Fragile borders. Fluid histories’ and it also includes an
on-air section comprising a selection of radio drama shows.

LAW A government ordinance on capping firewood prices is to be amended next
week, so that it may offer real protection to those using this material for
heating, Environment Minister Tanczos Barna has told Radio Romania. He explains
the law, which has already been endorsed by the Senate is going to be amended
in the Chamber of Deputies so that firewood become available on the market as
soon as possible. According to Barna, several alternatives are presently being
considered, including that of granting vouchers to the have-nots. A couple of
days ago, Prime Minister Ciuca admitted the 80-euro capping per cubic meter of
firewood, a measure implemented in mid-October, failed to yield the desired
result. The opposition USR has drawn attention to the fact that the law has
already caused irregularities on the firewood market and urgent amendments are
needed. At the same time the USR makes an appeal to the main ruling parties to
overcome disputes on capping energy prices and focus on the risks concerning
the winter supplies.

OPERATION The Europol on Friday announced the
apprehension of 382 people in late-October during an ample sting operation
involving the participation of police forces from 28 countries against traffic
networks mainly operating in the Balkans and southeastern Europe. According to
a Europol communiqué, the EMPACT operation, which also involved Romania,
focused on firearms, drugs and human trafficking. Most of the arrests have been
operated among migrant smugglers. 16 thousand police officers in the EU
countries have participated in the operation; they have been backed by their
colleagues in non-EU countries, which are part of the so-called crime network
also known as ‘the Balkans Route’.

(bill)

5 November 2022
Worries over prices of fuel

The Bucharest government continues, this week, to analyze the energy legislation, in an attempt to control the increase in prices in the field, and is also working on a strategy for non-energy mineral resources. At the same time, the Ordinance on capping the price of firewood comes back to the attention of the senators from the specialized committees, after the document drawn up by the government triggered a crisis on the market. With regard to energy, the executive is analyzing the draft of a normative act, developed by the relevant ministry, which would regulate, under certain conditions, the internal market.

The State Secretary with the Ministry of Energy, Dan Drăgan, says that the market has been somewhat regulated, but that new measures are being sought for the future as well. Dan Drăgan:

“At this moment, we are analyzing all opportunities, all options and scenarios that can be prepared in case such a measure becomes necessary. The market is already somewhat regulated, through the ceilings that were established for both electricity and natural gas. As I said, we are evaluating certain scenarios that we could implement and we are also in discussions with partners in the government, namely the Ministry of Finance, to see the sources needed for these payments.”

Also this week, the Romanian Government is preparing the strategy for non-energy mineral resources – Horizon 2035. The normative act aims to find mineral resources that can be exploited, to create a national copper industry, to produce finished products with high added value and to ensure the superior exploitation of graphite, for the production of batteries in the country.

As regards the crisis on the Romanian wood market, after capping the price at approximately 80 Euro per cubic meter, firewood and derived products have disappeared from the market. In this context, specialists in the field point out that the capped price is not realistic, because it does not cover costs such as processing or transport. Moreover, the representatives of the ProLemn Association demand the reduction of VAT to 5% for all wooden products intended for home heating, given that the price cap has created severe blockages in the market.

According to them, there cannot be a single price valid for all firewood distribution chains. Most likely, the Ordinance on the firewood price cap will be amended by the senators so that the vulnerable categories are supported during the winter period. The Save Romania (USR) Senator Aurel Oprinoiu explains what this support will consist of:

“To come up with a system of vouchers, in which we can help the vulnerable ones, as we did for other categories of citizens of Romania in this period of crisis, with a ceiling and, obviously, with support for electricity or gas.”

The senators must come up with a solution these days, otherwise the ordinance will pass silently in the current form in the Senate, which is the first chamber notified. (MI)

31 October 2022
Talks on reducing energy consumption

The Romanian Parliament is debating the government’s emergency ordinance that extends the measure of capping and compensating for energy bills until August 2023. The ordinance also provides for overtaxing energy companies and fining those that speculate on the crisis in the field through successive sales and resales. These latter measures are contested by the business environment and the opposition. All in all, it is clear that the document will undergo adjustments in Parliament.

The governing coalition made up of the Social Democratic Party, the National Liberal Party and the Democratic Union of Ethic Hungarians in Romania (PSD – PNL – UDMR) analyzed possible changes to the ordinance that regulates prices on the energy market and the introduction of new support schemes, including to stimulate saving, as requested by the European Commission. Talks will continue next week. In order to reduce energy waste, the coalition leaders agreed that the Environment Ministry should come up with a proposal to replace filament light bulbs with economical ones as part of a scrappage program, similar to that already in place for household appliances and cars. The measure is also targeted to domestic consumers.

On the other hand, the Ministry of Waters and Forests must put together a project for capping the price of firewood for a period of 6 months. In parallel, the export of firewood and derived products for heating could be temporarily limited, both inside and outside the EU. Prior to these discussions, the energy minister, Virgil Popescu, recommended consumers to look for suppliers on the electricity market that offer them the lowest prices. He says that the Government is considering offering bonuses to those who will manage to save energy. According to the energy minister, 90% of the population consumes less than 300 kilowatts, therefore they will benefit from the bill capping measure.

The ordinance stipulates that a fixed price will be paid for the first 255 kilowatts consumed, and the difference up to 300 kilowatts will be charged with the price stipulated in the contract. In the case of natural gas, capping is applied regardless of consumption. Regarding the reduction of energy consumption in public institutions, minister Virgil Popescu said that each ministry come up with its own plan and take the necessary measures. Some public institutions, big electricity consumers, have already implemented measures to reduce wasting. Thus, at the huge Parliament Palace, one of the largest administrative buildings in the world, insulation for thermal purposes of some areas of the building will be undertaken, the interior lighting sources will be replaced with LED sources and the exterior lighting will be reduced by 50%. At the same time, the festive lighting of the facade was reduced to two hours. (LS)

16 September 2022
Energy price capping ordinance reaches Parliament

Given the situation caused by the increase in the price on the electricity and natural gas markets at international level, Romanian authorities are looking for solutions, just like the other European states, in order to further help their citizens. After intense debates, the Emergency Ordinance regulating these prices for one year, starting April 1, was approved by the Government on Friday and is to be debated by Parliament next.

The measure will apply to both domestic and industrial consumers, based on the average monthly energy consumption registered in 2021 and the final prices for natural gas. According to the Minister of Energy, Virgil Popescu, the provisions of this ordinance will benefit eight million households, in terms of electricity, and all households connected to the natural gas network, regardless of consumption. The ruling Social Democratic Party (PSD) and National Liberal Party (PNL) give assurances that the measures adopted by the Executive will have major positive effects on Romanians’ purchasing power and will ensure the predictability of costs next year.

However, the Save Romania Union (USR) believes that the ordinance blocks investments in the two sectors, and representatives of the Alliance for the Union of Romanians (AUR) say that, through the approved measures, the Government guarantees very high profits for energy companies, providing them with state subsidies. After reaching a consensus on new regulations on electricity and gas prices, representatives of the governing coalition each support other initiatives that they say will ensure an increase in employee income, strengthen the economy or reduce the pressure on inflation.

PNL proposes to reduce the health insurance contributions from 25% to 20%, as a measure to increase the net salary. The party’s leader, Florin Cîţu, sees it as the only measure that could increase the net income of all employees and that would not represent a cost for companies. According to him, this would have a smaller impact than subsidising energy bills and explains where these amounts could come from.

Florin Cîţu: From the same place where we get the money for energy bills, only here we are talking about a benefit for all Romanians, money that will be, on the one hand, invested in the economy, and we ‘ll also have money left over from corporate profits. That means about 20 billion lei (n.r. about 4 billion euros) that will stay in the budget.

USR supports the measure, but the Social Democrats (PSD) do not believe that the proposal is sustainable for the state budget. PSD President Marcel Ciolacu:

We have asked the Minister of Finance to give us an estimation of the budgetary impact. From my point of view, given the interventions regarding energy, I don’t think it’s sustainable. But maybe those who proposed it have a miraculous formula.

Instead, the Social Democrats have announced that they want a quick regulation of fuel trade and are calling for measures regarding vehicle insurances, which they say would reduce both transport costs and the inflationary pressure. (MI)

21 March 2022
Debates on capping energy bill prices

In Romania, the price of gas and electricity bills has exploded in recent months, and in some cases has even increased 4 up to 5 times, despite the fact that, in October, a law was adopted according to which, between November 1, 2021 and April 1, 2022, the final price of electricity bills is capped at a maximum of 1 leu/kWh, and that of natural gas at a maximum of 0.37 lei/kWh. Furthermore, this law also compensates for the prices of electricity and natural gas bills for household consumers if they meet certain consumption limits.

The law on capping and compensating energy prices will be amended by the government, says the energy minister, Virgil Popescu, so that the suppliers who miscalculated the bills, ignoring the law, can re-issue the bills without paying penalties. An increase in gas bill compensation is also being considered and it will be forbidden to disconnect consumers.

Moreover, the government intends to also take measures in relation to the food industry and agriculture. Here is the energy minister, Virgil Popescu: “From February 1, we will discuss a package for the food and agriculture industries. We may also discuss an additional discount on natural gas, we either increase the discount from 33% to 50% or reduce the VAT for gas. We will find solutions for the continuation of this scheme as of February 1 and April 1, respectively.”

The energy bill crisis has caused reactions from the leaders of the governing parties, PSD and PNL. Mutual accusations have been made, the resignation of the leadership of the Energy Ministry and of the Romanian Energy Regulatory Authority — ANRE was asked, and proposals were made to balance the situation. The Social Democrats are dissatisfied with the law initiated by the Liberals regarding the compensation of bills and the capping of energy prices, and several PSD members asked for the dismissal of energy minister Virgil Popescu. PSD leader Marcel Ciolacu believes that quick solutions are required, such as capping the VAT on energy and natural gas, but also organizing a meeting of the Supreme Council of National Defense – CSAT.

Marcel Ciolacu: “We are obviously in full crisis. I think that people expect solutions from this coalition, which has a comfortable majority in the Romanian Parliament, rapid solutions, found now, not as of April 1.”

The president of the PNL Florin Cîţu says that talks on the issue should be more pragmatic, without populist messages and solutions that have a big impact on the budget. Florin Cîţu: “I would prioritize. We cannot talk about measures that discriminate or promise that we will pay everyones bills, we cannot promise all kinds of tax eliminations. The balance we have reached in the economy in recent years can be easily disturbed”.

Trade unions and employers’ associations also demand the capping of energy and natural gas bill prices both for domestic consumers and companies, and point out that without systemic and unitary measures, many companies will go bankrupt. (LS)

17 January 2022