The European Union has urged Romania to revise its energy price-capping scheme, asking the government to permit gas and electricity producers to establish their own prices. This request was made in a letter, with Romania required to respond within two months. The letter initiates an infringement procedure that could escalate to the EU’s Court of Justice if not addressed.
The European Commission’s main concern is Romania’s mandate that gas producers sell 1 MWh to suppliers and thermal energy producers for RON 120 (approximately EUR 24.10). This price control is set to expire at the end of December but is likely to be extended until March 2024. Similarly, electricity producers are encouraged to sell at a capped price of RON 400 (around EUR 80.33) per MWh, with any earnings above this amount redirected to the state. These caps were implemented as part of the government’s response to rising energy costs.
Romanian Energy Minister Sebastian Burduja defended the price caps, stating they are essential for protecting citizens and businesses from energy price volatility. “We took measures to shield Romanian citizens and the economy from the significant rise in electricity and natural gas prices,” he explained to local news outlet Digi24. He noted that these measures included capping production prices, taxing excessive profits, and limiting final consumer prices.
Burduja mentioned that the EC has already opened two cases concerning these market interventions, one dating back to January 2023, before his appointment as minister. He described the EU’s recent letter as a “moderate approach,” recognizing the ongoing challenges Romania faces in the energy market. He emphasized that Romania has the time to respond and potentially adjust its strategy to comply with EU regulations.
If Romania does not adequately address the EC’s concerns within the two-month timeframe, the EU may issue a reasoned opinion, providing the country with another chance to comply before escalating the issue to the Court of Justice. Burduja confirmed that Romania is already planning for the period following April 2024, when the current price cap scheme is set to end. He stated that the government aims to develop a plan to protect vulnerable consumers, particularly those in energy poverty, while resolving the dispute with the EU.
“We will also discuss this set of measures in detail with the EC to achieve both goals,” he added, indicating the desire to continue supporting Romanian citizens while meeting EU regulatory requirements.
The EU’s pressure comes at a crucial moment for Romania, which faces the dual challenges of high energy prices and the need for compliance with EU regulations. While the government’s interventions have provided short-term relief, the impending infringement procedure highlights the difficulty of balancing domestic economic needs with European market rules. The outcome of these discussions will likely influence Romania’s future energy policy, as the country strives to protect consumers without conflicting with EU competition laws.
