BUCHAREST (Romania), February 27 (SeeNews) - Romania will lose 2.26 billion lei ($549 million/483 million euro) in taxes this year after the government capped natural gas prices in late December, Deloitte said.
The three-year cap on gas prices will have negative effects on the natural gas market and on the entire Romanian economy, eventually affecting the consumer, Deloitte said on Tuesday in a study commissioned by the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA).
The competitive gas market in Romania will eventually cease to exist between April 2019 and March 2022, because the obligation to sell natural gas at a regulated price will make competition in gas production fade, with small independent producers no longer able to finance their operations at a capped price, the study showed.
Deloitte said that although the government said the citizens' best interest is at the heart of its decree introducing these regulatory measures, they may lead to a higher price for consumers.
"In order to protect the interest of consumers, Romania should carefully assess the proper implementation of the vulnerable consumer concept, provide financial support directly to those who need it, and avoid subsidizing households that exceed the average regional/national income," Deloitte said.
The government decree issued in late December forces domestic natural gas producers to sell their output mainly to suppliers at the regulated price of 68 lei ($16/14 euro) per MWh until 2022, down from 90 lei previously. It also enforces a 2% tax on turnover for energy companies that will be retroactive for 2018.
Other major fiscal changes in the decree include a 'greed tax' for banks and new rules for the operation of private pension funds.
($= 0.8796 euro)