Romanian Government Extends Energy Price Caps

Romania Extends Energy Price Caps for Households and Businesses

BUCHAREST (Reuters) - Romania's coalition government will extend a price cap on electricity for households and businesses until June and on gas for a year, Prime Minister Marcel Ciolacu said on Thursday, to shield consumers from a recent surge in energy costs.

Romania has been capping gas and power bills for households, small businesses, hospitals, schools and public institutions up to certain monthly consumption levels and compensating suppliers for the difference since November 2021.

The scheme has been modified several times and was due to expire at the end of March. Suppliers have repeatedly complained about delayed government payments and observers have warned market distortions will be difficult to redress.

"We will approve today continuing the energy price cap," Ciolacu said at the start of a government meeting.

"For electricity until end-June and until then we will introduce measures to increase market volumes so that prices remain low. For gas we will keep the cap for another year to rebuild our stored reserves for next winter at manageable prices."

Romania uses a mix of gas, coal, hydro, nuclear and renewables for electricity generation and has committed to phasing out lignite, or brown coal, although the energy ministry is currently seeking an extension.

The country produces almost all the gas it consumes locally through producers OMV Petrom, state-owned Romgaz and offshore producer Black Sea Oil & Gas (BSOG).

(Reporting by Luiza Ilie; Editing by Alex Richardson)