Romanian Govt “Firmly” Rejects Immediate Gas Price Deregulation

"(The IMF) can request it, but the Government does not agree. This is not a measure to be taken from one day to the next. We firmly reject this idea," Borbely said.

He added that gas price liberalization is currently being discussed, but the measure needs to be implemented in time.

IMF representatives approached local authorities Tuesday proposing the liberalization of natural gas prices, while maintaining regulation on household and captive consumer prices.

The ministry said in a release the proposition was taken into consideration, but a decision is pending.

"At the moment there aren't any official talks at the government level regarding the liberalization of natural gas prices. (…) In upcoming months, the ANRE will analyze the IMF's proposition and will inform the Government on the viability of this endeavor," the news release said.

Economy minister Ion Ariton said after the meeting with the IMF that deregulating tariffs for electricity and natural gas does not necessarily lead to higher prices for household clients.

In 2010, ANRE said it would order a survey to analyze the impact of a potential gas and electricity price deregulation.

According to ANRE's regulations, all local power producers must sell electricity to households at prices established by the agency. Moreover, the agency sets production prices for gas producers OMV Petrom (SNP.RO) and Romgaz Medias.

An IMF delegation is in Bucharest until February 8, to evaluate Romania's compliance with the terms of a EUR13 billion stand-by loan and to negotiate a follow-up, precautionary deal, after the current arrangement expires in May.

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