Romanian Govt Postpones Elimination Of Heating Subsidy

The bill package, comprising the ordinance and the welfare scheme, will be drafted by the Ministry of Interior, Ministry of Labor and Ministry of Finance, will be approved in late August and implemented starting this fall, said Prime Minister Emil Boc.

Early May, the Government pledged during talks with the International Monetary Fund to eliminate the thermal energy subsidy by the end of the year, which could increase household heating bills by up to 60%, depending on the local authorities' capacity to cover the difference. Jeffrey Franks, the head of the IMF mission to Romania, told MEDIAFAX the government plans to eliminate the state subsidy, but low-income households and individuals will continue to receive it, possibly even higher in value.

An emergency ordinance, drafted by the Government and presented last week by MEDIAFAX, said the Executive will no longer set reference prices of thermal energy for households and will allow mayors to approve, based on their own strategy, prices lower than those charged by suppliers, provided they cover the difference from the local budget.

The heating subsidy is currently provided both from the state budget and from the local budgets. The Government covers up to 45% of thermal energy producers' fuel costs.

Some 1.54 million apartments, out of a total 8.32 million homes, are currently connected to the centralized heating distribution system.

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