Romanian coalition holds more talks on energy prices

The government analysed several proposals to lower the impact of energy price increases which were to be discussed by the coalition later on Monday evening, but a consensus is yet to be reached. [Shutterstock / Sashkin]

The government coalition is still looking for ways to ease the burden of energy prices on vulnerable consumers and companies, while the opposition is demanding ministerial resignations.

The government analysed several proposals to lower the impact of energy price increases which were discussed by the coalition on Monday evening, but a consensus is yet to be reached.

”The main focus is to protect vulnerable consumers, but also essential institutions such as schools or hospitals, while taking measures to allow the proper functioning of the economy,” Prime Minister Nicolae Ciuca said.

The socialist party PSD proposed a temporary reduction of the VAT rate for electricity and natural gas from 19% to 5% as of 1 February. Energy Minister Virgil Popescu, a member of the centre-right PNL, proposed the VAT decrease come into effect as of 1 April, when other measures – a cap on energy prices and deductions for a large category of consumers, which are already enforced – will end.

Meanwhile, several regulators are checking energy companies in the context of reports of very large energy bills that did not include the caps or the deductions. Major energy suppliers have already been fined, but they have contested the penalties.

Trade unions and employers’ associations are requesting a new cap on energy products set at the prices from December 2020, claiming the increases observed on the local market are much higher than those reported on international markets.

The socialist party wants to extend the support to household consumers and SMEs, education and cultural institutions, churches, hospitals, and critical infrastructure. They noted that the railway company, for example, would be forced to increase ticket prices due to the significant rise of electricity prices.

The political noise peaked when the opposition party USR asked for the energy minister’s resignation and claimed the measures already adopted by the government of PSD and PNL had worsened the energy crisis.

USR proposed months ago to cut the VAT rate for electricity and natural gas, saying that the capping of prices and the partial compensation of bills would not calm the market but would rather have the opposite effect.

(Bogdan Neagu | EURACTIV.ro)

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