Politics to shield Romania industry from 57% gas price hike - bank

20 March 2013 16:26  [Source: ICIS news]

LONDON (ICIS)--Political tensions should prevent the implementation of a scheduled 57% gas price hike for industrial customers in Romania this year, Erste Group Bank said on Wednesday.

“Based on [the government's gas deregulation] plan, regulated natural gas prices should be increased by 57% for regulated industrial customers and 15% for households in 2013 alone, which we think is unrealistic, in light of the political tensions that would be caused by such a move,” Erste said in a report looking at prospects for oil and gas company OMV Petrom.

“We expect a 20% average gas price hike in 2013 in Romania in the case of regulated prices and 10% in subsequent years until 2016,” it added.

In line with pledges made to the European Union and International Monetary Fund, Romania is gradually raising its gas prices prior to deregulating the gas market.

Romania is highly dependent on Russia for gas, but on 19 March its prime minister, Victor Ponta, announced that a moratorium on shale gas exploration had been ended in order to give the country a chance to reduce this dependence.

By: Will Conroy
+44 20 8652 3214

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