Romanian Govt Cannot Decide Gas Prices – PM

The government is in negotiations with the International Monetary Fund, but does not have the competence to establish gas tariffs for the local producers.

On Tuesday, IMF asked Romania to renounce to the regulated price for the production of electricity and natural gas and to draw up a new calculation formula in this respect.

"They asked us to verify again the prices, to liberalize them and to present a new calculation formula during this year," Economy Minister Ion Ariton said Tuesday after meeting the IMF delegation in Bucharest.

Deregulating tariffs for electricity and natural gas do not necessarily lead to higher prices for household clients, the minister said.

Shortly afterwards, the Economy Ministry said the gas price policies proposed by IMF are not yet on the Government agenda, but ANRE will look into the matter in the upcoming months and reach a decision.

In 2010, Romania's energy regulatory authority ANRE said it will order a survey to analyze the impact of renouncing to the regulated tariffs on electricity and natural gas.

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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