ROPEPCA: Deregulating the Gas Price is Only the First Step Towards a Functional and Competitive Gas Market

The Romanian Petroleum Exploration and Production Companies Association (ROPEPCA) considers the proposal forwarded by the Industries and Services Committee within the Chamber of Deputies being beneficial and necessary, regarding the repeal of the articles referring to the energy field in the Government Emergency Ordinance no. 114/2018 and hopes that the same will happen in the rapporteur committees. The provisions of the ordinance cap the price of gas for the producer and introduce a new contribution of 2%, having as negative consequences the artificial increase of the unregulated price and the reduction of investments. In addition, truly vulnerable consumers are not protected by these measures.

ROPEPCA has advocated for the repeal of the provisions of the ordinance regarding the energy sector ever since its adoption, constantly demonstrating its negative consequences through expert opinions and an independent impact study. Although in effect for only a few months, the measures imposed by Ordinance 114 have disrupted the functioning of the gas market, leading to an artificial increase in the unregulated price and affecting the economic viability of exploration and production projects.

The repeal of the provisions is an obvious and stringent necessity, representing a first step towards a return to normality and the rehabilitation of investor confidence in Romania as a destination for energy projects.

In order for the energy sector to become truly competitive and diversified, functional market mechanisms and measures for the real protection of vulnerable consumers must be integrated. It is also necessary to stimulate the production activity by updating the legislation for streamlining petroleum operations, removing bureaucratic barriers and modernizing the data regime.

Through such measures that have a significant impact on the national economy, new investments can be attracted, production is increased and security of consumer supply ensured.

“The proposal to repeal ordinance 114 is a positive signal. It is important that we return to the principles of legislation made with the participation of experts and consulting the business environment, which will stimulate the exploration and production activity in the long term and that will diversify the gas market,” says Saniya Melnicenco, President of ROPEPCA.

Currently, in Romania there are over 400 petroleum fields and over 13,000 active wells. Through the efforts of companies in the sector, more than 90% of Romania’s natural gas consumption is ensured. Significant investments and a stable, predictable and competitive regulatory framework are needed to maintain the oil and gas production level constantly.