E.ON Romania Chief Wants To Meet PM To Talk Tariffs

„We want to talk to Prime Minister Emil Boc, to explain the situation on the energy and natural gas market from the investor’s point of view. E.ON wishes to remain in Romania, because it is an interesting market,” chief executive Frank Hajdinjak told MEDIAFAX.

He said Romania could play a strategic role in the energy field in southeastern Europe, but it needs proper management.

„Romania’s position in the region can be a strong one, as it has all types of resources: coal, natural gas and oil. Romania can play a very important role, provided it uses its potential together with its neighbors,” Hajdinjak added.

The official said the economic crisis has hit Romania later than other countries, but its effects were severe.

According to Hajdinjak, the national energy regulator ANRE should allow the company to increase gas tariffs by 17% and electricity prices by at least 5%, given that E.ON is currently selling below cost.

„The import gas prices rose by more than 10% in the first quarter compared with the quarter before, and they are bound to add another 10%-15% by year-end,” he said.

„We are forced to cut investments, though they are very necessary.”

Hajdinjak said E.ON Romania will eliminate all non-essential projects, adding that the fewer investments would negatively affect other companies as well, including various service suppliers.

„E.ON buys most of its goods on the Romanian market, so the impact will be at macroeconomic level,” he added.

The German company started operations on the Romanian market in 2005, after it bought state-owned electricity producer Electrica Moldova and gas distributor Distrigaz Nord.

Since then, E.ON invested EUR400 million in Romania. For 2010, the company estimates overall investment will reach 260 million lei (EUR1=RON4.0682), similar to the 2009 level.

However, the sum might be smaller, unless energy and gas prices are raised to „reasonable” levels.

„The talks with the energy regulator are difficult, but I believe they understand our problem. We don’t get the promised profitability,” Hajdinjak said.

Earlier this week, ANRE said power prices will remain at their current levels until January 2011, but natural gas prices might be adjusted for the 2009 inflation sometime this year.