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    Romania lowers caps on gas, power prices


The government also aims to revise its offshore gas tax in the first half of the year to encourage investment in domestic supply.

by: Joseph Murphy

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Romania lowers caps on gas, power prices

Romania's government will increase its support for households and small businesses facing higher energy bills at the start of next month, prime minister Nicolae Ciuca said on January 17.

The government will issue an emergency decree setting the price of electricity for small energy users at 0.68 lei ($0.16)/kWh and the price of gas at 0.31 lei/kWh, Ciuca said. The caps were set late last year at 1 lei/kWh and 0.37 lei/kWh respectively. 

The support will also be expanded to energy users consuming up to 500 kWh/month, from the previous limit of 300 kWh. 

The government's decree will remain in force until March 31, with the impact of the subsidies to the budget expected to come to 3bn lei ($690mn). Besides households and small businesses, hospitals, schools and some food producers will also benefit from the support, the government said.

The spike in gas and power prices in Europe over the past year has put pressure on Romania's government to roll back taxes and extra regulations imposed on offshore gas projects at the end of 2018, which the industry has complained has stifled investment. Citing those changes, OMV Petrom and ExxonMobil have held back on sanctioning the 84bn-m3 Neptun Deep gas field in the Black Sea.

Romanian energy minister Virgil Popescu said on January 17 that the government aimed to revise the offshore gas tax in the first half of this year after repeated delays, acknowledging that the levy had delayed projects.

"We will have one more talk in the governing coalition and the  offshore law will be changed in the current parliamentary session," Popescu told Reuters. 

The offshore tax is the last of the 2018 changes that Romania is yet to reverse. The three parties that form the country's government committed to revising the tax in their coalition agreement. But Popescu said producers would still have to sell 40% of their output domestically.