The Romanian Government is currently looking for ways to finance the support scheme introduced with the aim of helping the population and companies mitigate the effects of the ongoing energy crisis. Romania has one of the most generous support schemes and it looks like the Government has underestimated its costs.
The estimated cost of the support scheme has increased to 8.1 billion euros from 2.8 billion initially announced by the Government in February. Energy suppliers say that, if they don’t get the money the Government has promised, the whole energy system could crash.
Minister of Investments and European Projects Marcel Bolos said that the Ministry of Energy is working on the new ways to compensate residential and commercial energy consumers as well as to find funding sources for the scheme. He explained that a system of supplementary taxation for the producer-distributor chain and for the traders on the wholesale market who, sometimes unfairly, have accumulated substantial capital during the crisis, should be introduced. It is an option that can generate additional income for the state budget and furthermore, the compensatory measures would have a source of financing.
Earlier this month, Minister of Energy Virgil Popescu said that the cap and subsidy support scheme for the electricity and natural gas prices last winter generated a total cost of around 600 million euros for the state budget. He said that all the settlements to the suppliers are fully covered by the dividends received by the Ministry of Energy from the profit of majority state-owned electricity producer Hidroelectrica.
This is rather surprising since the cost of the support scheme should have been covered by the supplementary tax on the windfall profits of the energy (electricity, natural gas) producers. However, nothing in the financial report for the first half of 2022 of Romania’s largest oil and gas company OMV Petrom indicates that such taxes were levied.