Natural gas transactions have increased in Romania


Natural gas transactions registered, in the first quarter, an increase compared to the similar period of the previous year, which is unfortunately under the incidence of GEO 114. Thus, the total volumes traded in the first three months reached 10TWh. In spot markets, the average monthly quantities ranged from 400,000 to 700,000MWh, presenting a regularity and intensity specific to this market, sufficient to ensure continuity in balancing the portfolios of market participants. The weighted average prices for the months of January-March saw a continuous decrease, from 70.8 lei / MWh in January, to 66.4 lei / MWh in February, respectively 59.6 lei / MWh in March.

In the wholesale markets, the standardized forward type contracts experienced a spectacular increase towards the end of the period, only in March trading a volume of over 7 TWh. The periods concerned were both the months of the II a.c. quarter and the cold season of the following gas year, i.e .trim. IV 2020 and trim. I, 2021. For trim. In BC, the weighted average price was 59.66 lei / MWh, about 15% lower than the regulated price imposed by ANRE. For the following cold season, the average price was 74.3 lei / MWh, being at a level of 62-65% from the prices of the same period of the previous gas year (quarter IV 2019-quarter I 2020).

The obvious downward trend in prices is proof of normal market re-entry, with the approaching cancellation of the regulated prices imposed by GEO 114, starting in July. A contribution to this reduction is normally also the effects of the last cold season, with favorable temperatures, and the decrease of the economic activity caused by the epidemic with COVID-19. However, given that the downward trend started from the fourth quarter of 2019, announced at that time by BRM releases, as well as the fact that the following cold season is far removed from the current crisis, the main causes derive from the return to market liberalization and failure of the functioning of market mechanisms. The negative effects of the authorities’ brutal interventions on the market have thus been demonstrated for the second time in the last few years.

The liberalization of prices for producers by issuing GEO 64 in 2016 was followed by a reduction and stabilization of prices, below the level expected by regulation by the authorities before the emergence of the ordinance and by 10-15% below the level of the Central-European stock exchange, CEGH. The favorable situation was maintained throughout 2017 and 2018, until the new market regulation imposed by the government by the emergence of GEO 114. The provisions lacking its economic logic, in total contradiction with the European legislation and applied even more erroneously by the regulatory authority. , have bumped the entire market, raising the prices of the cold season to more than double the other European stock exchanges.

The first two quarters of the current year are and will continue to be affected by the effects of GEO 114, amplified and by ANRE decisions resulting from the imposition of unusually high quantities during the winter period, with significant volumes contracted at extremely high prices on the market. The effects of these contracts are felt by a large part of the traders, but also by the final consumers, but their disappearance can be estimated towards the middle of the year.


Please enter your comment!
Please enter your name here