Romanian Industry Braces for Rise in Gas Price

Gas prices for industrial consumers in Romania will rise by a thumping 24 per cent as of next month, with a sharp impact likely on industry and jobs, experts say.

The move is part of a deregulation schedule agreed with international lenders including the International Monetary Fund, IMF and the World Bank.

Under the scheme, gas prices are set to further soar by a total of 72 per cent by October 2014.

The price of natural gas delivered to household is also to be fully liberalized by end of 2018.

Analysts say the increases in gas prices for industrial consumers, such as electricity producers, and chemical and steel plants, will hit the Romanian economy.

“The country runs the risk of a 6-per-cent contraction in the economy and over half a million jobs lost if gas prices for industry are aligned with the EU average by the end of this year,” a Deloitte report said.

Industry representatives have asked the government to cancel the price rise and look again at the price liberalisation timetable.

“The so-called liberalization of the natural gas market will lead to company closures and relocations to other countries,” said Mihai Ivascu, from CONPIROM organization.

The government on Wednesday announced that next week it intends to present a plan of support for industrial consumers. No further details were offered, however.

Romania produces about 13 billion cubic metres of gas a year, representing about 70 per cent of its annual needs. It imports the rest exclusively from Russia.

Romania is looking to reduce its dependence on Russian energy, mainly by diversifying gas supply routes.

In 2009, when the Russia-Ukraine dispute led to cuts in gas transported through Ukrainian pipelines, Romania...