Gas and electricity prices for households, which had remained on the regulated market, will be gradually liberalised in 2020 following a troubled period generated by emergency ordinance (OUG) 114/2018. But the bad effects may prove difficult to overcome, according to Business-Review.eu.
From July 1, the current price cap for gas sold to households will be removed, and electricity prices will be fully liberalised as of January 1, 2021.
Disruptive regulatory effect
Prices were re-regulated last year through OUG 114/2018, but the new government has decided to cancel the rules introduced by its predecessors. OUG 114 imposed a special tax of 2 percent on turnover, capped the final gas price at RON 68/MWh and limited electricity producers’ profit margin at 5 percent for energy supplied to households. On the electricity market, the measure mainly hit the most stable and profitable energy producers in Romania, Hidroelectrica and Nuclearelectrica, which produce the cheapest electricity in the system. At the same time, the new rule had some beneficiaries as well: the electricity distributors on the local market.
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