Romania freezes electricity and gas prices for 5 months

Parliament also slashes gas and electricity VAT to 5 percent in an effort to tackle rising energy prices

editor: REMIX NEWS
author: Mandiner
Joint session of the two chambers of teh Romanian Parliament. (MTI/EPA/Robert Ghement)

The Romanian parliament has temporarily frozen the price of electricity and gas for five months and reduced the VAT on the two energy sources to 5 percent, while also providing consumers with temporary energy price compensation.

After the law was previously voted on by the Senate, the House of Representatives passed it as well, so now the bill only awaits the signature of President Klaus Iohannis before it can come into force. The provisions of the legislation are for five months, from Nov. 1 to March 31, 2022.

According to the law, utilities may not sell electricity to consumers at a price higher than 1 lei per kilowatthour (€0.20). In the case of natural gas, the price of natural gas per 1,000 kilowatt hours may not exceed 250 lei (€50.50). In addition to residential consumers, the price freeze also applies to schools, hospitals, NGOs, and churches.

As Remix News reported on Wednesday, some 56,000 households of the third-largest city in Romania, Temesvár (Timisoara), had their central heating cut off as the heating companies amassed debts on their gas bills.

Parliament also voted for price compensations to a significant proportion of consumers, which the state will pay to utility companies. In the case of electricity, the state pays 0.29 lei per kilowatt-hour to the utilities instead of the consumer, and for gas, the consumer price per kilowatt-hour also decreases by 33 percent due to state compensation.

Romanian Energy Minister Virgil Popescu said after the parliamentary vote that the law would protect 15 million Romanians, 70 percent of the population, during the winter months. The law would keep them from having to pay higher overheads compared to last year due to significantly increased international energy prices.

Sándor Bende, member of parliament of the Democratic Allaince of Hungarians in Romania (RMDSZ) and chairman of the industry commission, said that if a three-room apartment consumed 150 kilowatts of electricity, the owner would have to pay 150 lei, of which the compensation is 43.5 lei, so the final bill is 106.5 lei. For an apartment of the same size, the monthly gas bill would cost 329.25 lei, but without the compensation it would run to 500-600 lei.

The legislation also reduced VAT on electricity and gas from 19 percent to 5 percent. The law was also welcomed by RMDSZ President Hunor Kelemen, who reminded that his party had already proposed in July to freeze and compensate for energy prices, which has now happened.

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