July brings higher prices for natural gas and lower electricity bills for industrial consumers

Natural gas prices will be higher starting from July 1, for both households that will pay by 2.5 percent more and industrial consumers for whom the price increase is lower, by 1.5 percent, said Niculae Havrilet, President of ANRE, the National Regulatory Authority in Energy, while attending the regional energy forum FOREN 2014.

The increase follows the decision of augmenting the share of imported natural gas up to 10 percent of domestic consumption in July, mostly for storing the natural gas and enhancing supply security, given the conflict in the region, between Ukraine and Russia, Havrilet stated, according to Agerpres. “This means a price increase by 1.5 percent for industrial consumers paying regulated prices and a 2.5 percent increase for households”, he stated.

On the other hand, he announced that electricity will be cheaper for industrial consumers as the related prices will see an average drop by 3 percent as from July. Large consumers, though, will possibly pay even less, by some 4.5 percent, says Havrilet. He further explained that it was foreseen a price increase ranging from 1.2 to 1.5 percent due to the costs Hidroelectrica and Nuclearelectrica have with the tax on special constructions and which will be reflected in electricity bills.

However, the expected rise in price will be offset by a smaller cogeneration tax, as the energy producers using high efficiency cogeneration technology will get a reduced bonus with effect from July. Yet, only industrial consumers will benefit from cheaper electricity, as the price paid by households will not change.

According to the energy liberalization timetable the Romanian Government undertook to respect based on an agreement with the International Monetary Fund in 2012, the natural gas market for industrial consumers should be fully liberalized by the end of this year, allowing a possible extension by December 31, 2015, while in the electricity market liberalization had already been completed on January 1, 2014. For households, natural gas price liberalization is scheduled for completion on December 31, 2018, while in the electric power segment the deadline is set a year earlier.