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E.ON Gaz Romania: Gas prices to rise by 30% in 2008

Gas prices for final consumers will rise by 30% by the end of 2008, with the year due to start with a 10% hike following imported gas price increase, estimates E.ON Gaz Romania, which acquired Distrigaz Nord - reports Ziarul Financiar.

At the same time, the company says that unless these hikes are applied, consumers will be hurt by the cutback of imported quantities. If the energy ruling authority (ANRE), the only one setting the level of prices end consumers pay for power, natural gas respectively, endorses this hike, the impact over inflation will be of 0.2%. Thus, instead of the 3.8% estimated level of inflation for next year, inflation may hit 4%. Achim Saul, E.ON Gaz Romania board chairman, says that if the increase does not come into effect, the company will have to import less gas, which will have a negative impact over its consumers, or else risk experiencing serious financial problems. Now, household consumers pay on average 914.3 lei per 1,000 cubic metres of natural gas in Distrigaz Sud network and around 906 lei in E.ON Gaz Romania network, with the latest price hike, of 3.7%, having been announced in late September.

ANRE says these are exclusive estimates of the company it would not comment on, with official prices to be announced shortly. Distrigaz Sud made no comment on this issue by edition close. Statements are entirely contrary to what the economy and finance minister Varujan Vosganian said late last week. He said natural gas prices would not see a two-digit increase in January 1st, 2008, and that the average increase for the entire year for gas and electricity would be below inflation. „The goal for 2008 is for the price mix (for electricity and gas i.e.) to have an anti-inflationary effect (...),” stated Vosganian. ANRE announced imported gas would be more expensive starting January 1st by $50/1,000 cubic meters, by 15%-16% respectively, with the price to reach $360-365/1,000 cubic meters. The price of gas imported by Romania currently stands at $310-315/1,000 cubic meters.

Romania imports exclusively from Russia through several companies such as Imex Oil, Conef, Wintershall. At the same time, for the time being, prices of gas produced domestically, standing at 470 lei ($195/cubic meter) will not rise, but will further get close to the level of EU states. „Romanian consumers are supplied with natural gas from domestic production (around 60%) and with imported natural gas (around 40%). The price of natural gas traded on international markets is tied (...) to the price of oil traded on international markets. Therefore, starting January 1st, 2008, prices of imported gas will rise for Romania as well by almost 20%, with hikes of around 60% being expected by late 2008,” explained Saul. (