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Romania considering energy subsidies for households

Romania considering energy subsidies for households Source: ministry FB page

BUCHAREST (Romania), September 16 (SeeNews) - Romania's government is considering subsidizing energy prices for vulnerable household consumers after the market liberalisation led to higher bills, energy minister Virgil Popescu said.

The state will cover the subsidies from dividend payouts received from majority-owned hydropower producer Hidroelectrica and from taxes on the companies' revenues which grew as the market was liberalised, Popescu said in an interview for national television TVR1 on Wednesday evening.

Dividends from Hidroelectrica are seen at over 800 million lei ($191 million/ 162 million euro), Popescu said, adding that the subsidy will be paid by the state directly to energy providers, without any obligation for consumers.

The government is considering to cover 0.18 lei per kWh for households consuming between 30kWh and 200 kWh per month, out of the total price which now is around 0.8 lei per kWh. Regarding natural gas bills, Popescu said the government is considering to subsidize 25% of the bills' value for households with a consumption of over 1,200 cu m of gas per month.

"We aim to adopt an emergency decree at the beginning of October, so that it can be implemented starting November 1," Popescu said, adding that estimations indicate that 5.2 million households will need subsidies for their electricity bills, while for gas bills, the government has identified some 2.3 million vulnerable households.

Romania fully liberalised its energy market in January in order to comply with EU rules requiring energy prices in the EU to be set according to supply and demand.

Hidroelectrica is 80.06%-owned by the Romanian state, while investment fund Fondul Proprietatea owns 19.94%.

(1 euro=4.9481 lei)

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