The price of energy, capped again

Romanian authorities give assurances that energy prices will stay capped this winter

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Mihai Pelin, 11.08.2023, 14:00

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)