Romania’s hefty energy tax to put security of supply at risk – traders

Aura Sabadus


LONDON (ICIS)–A 98% tax on gas and electricity trading companies’ net revenues in Romania could lead energy markets to collapse and imperil security of supply in the country this winter, traders said.

Multiple traders interviewed by ICIS said the measures were so punitive that non-resident companies will pack up and leave the market while local companies will be bracing for a chain of bankruptcies and court cases just as the country is preparing for a difficult winter.

Under latest amendments to an earlier emergency ordinance announced on Thursday, the government introduced a 98% tax on gas and electricity trading companies’ net revenues.


Revenues from the tax would support energy transition costs and all trading companies, including resident and non-resident outfits, will be expected to pay it.

The vice-president of the ruling Liberal National Party (PNL) coalition called for the dismissal of senior policymakers at regulator ANRE after the watchdog sent a letter to the government warning that the latest measures would lead to the loss of energy suppliers.

The one-year tax entered in force on 1 September and will apply to supplies delivered under existing contracts as well as new contracts that may be concluded after that day.

With regards to electricity producers, the government also raised an existing windfall tax from 80% to 100% on the difference between the reference price set at New Lei 450.00/MWh (€93.00/MWh) and the actual price at which they sold the output.

In the case of electricity suppliers, the government will compensate them up to New Lei 1,300/MWh, which means that if they had paid higher prices to buy electricity to supply end consumers, they would not be compensated. The difference between the reference price and the actual market price is likely to be paid by the supplier.

In the third quarter of 2022, spot baseload electricity prices were in excess of New Lei 2,000/MWh.


The government also introduced a 5% penalty on companies which had engaged in speculative trading, meaning natural gas and electricity had changed hands several times. Speculative trading is a normal feature of developed markets where natural gas and electricity volumes change hands several times before they are delivered.

Non-resident companies are also expected to present a letter of bank guarantee or cash collaterals amounting to the equivalent in New Lei of €1m.

Speaking to ICIS, traders said companies will be unable to survive following the latest measures.

“If you have to pay a 98% tax on the difference between the purchase and sale price, how are you going to survive considering that interest rates are now pushing up to 7%?

“Banks will simply pull the plug on financing energy companies and even if the government was to make new changes to the amendments, the banks would not be willing to collaborate with energy companies. The regulatory and financial risks in Romania have been historically high. After this, they are lethal,” a first trader said.

A second source warned that the tax would also affect imports and exports of electricity and gas and that there was a high risk the country would face an electricity blackout because multiple companies would go bankrupt and would be unable to supply power to the grid.


He said the regulations were so drastic that they extended even to suppliers of last resort, which are tasked to guarantee supplies to end consumers.

Under latest arrangements, if a company is asked to become a supplier of last resort and has to buy volumes on the spot market to guarantee reliable deliveries, they would not be compensated if their purchase costs were higher than New Lei 1,300/MWh.

Under the latest amendments, the electricity cap for households is set at New Lei 0.68/KWh, including VAT for consumers with an annual consumption of less than 100KWh.

Electricity customers with an annual consumption ranging between 100-300KWh will have their prices capped at New Lei 0.80/KWh inclusive of VAT while small enterprises will benefit from a price cap of New Lei 1.00/KWh for 85% of their annual consumption, inclusive of VAT.

For natural gas, the price is capped at New Lei 0.31/KWh including VAT for households and at New Lei 0.37/KWh inclusive of VAT for non-households whose consumption is up to 50,000MWh.


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