Talks on capping energy prices

The authorities are discussing the possibility of capping energy prices

Daniela Budu, 08.10.2021, 14:00

Capping
the prices for electricity and natural gas is one of the priorities of the
relevant authorities, against the backdrop of the recent price hikes. According
to Energy Minister Virgil Popescu, the government subsidized energy and gas
bills for home users exceeding 68 bani per Kw, but growing prices across the
community bloc requires a new intervention.

I’ve
discussed this issue with my European counterparts, they have all expressed
concern. It’s clear we need to rethink the entire EU electricity market, meaning
it’s time we introduced other measures. In order to cap prices, we need to be
able to introduce a piece of legislation by emergency decree. It’s why I passed
the decree on Monday, so that it can come into force on November 1. Naturally,
we will intervene this winter in order to protect consumers. We’re also working
on plans for SMEs.

National
Bank spokesman Dan Suciu says the rapidly growing inflation rate is mostly due
to rising energy prices. Dan Suciu told Radio Romania that the bank’s decision
to increase the key interest rate to 1.5% per year was taken in order to tone
down the acceleration of other prices. The Central Bank cannot act on energy
price hikes, Dan Suciu says.

We
have no way of influencing the evolution of these prices. We can, however,
influence the cost of currency, by anchoring price estimates for other
products. This means we are limiting, so to say, the quantity of currency for
other products so as to avoid price hikes for other products, because energy prices
inevitably influence them as well. We are trying to keep them in check. It’s
hard to make estimates at this time of the year.

The
Central Bank official said the inflation forecast for the end of 2021, 5.6%,
will be exceeded in the context of soaring energy prices. The latest price
hikes are also discussed by the authorities. In opposition, the Social-Democrats
said their bill on capping these prices over a period of six months, which has
already been submitted to the Senate, will be adopted in Parliament by the end
of next week. In turn, USR says all home consumers can be supported first and
foremost by reducing excise taxes and VAT, and by introducing additional
compensatory measures. (VP)