19 October 2019

Gheorghe Russu

Vice-director, The Center for Combating Economic Crimes and Corruption

Parties-Phantoms, Parties - State Institutions, Parties - State Enterprises


20 parties have registered in the current election campaign. Many people say it is a too big number for such a small country as Moldova. At the same time, much more parties could take part in the election campaign.

Last week illustrated

Activists launch Moldova’s first ‘Space Camp’ © Susan Coughtrie

2010 brings higher tariffs for gas and energy

After the gas crisis in January and the two explosions at the main gas pipeline, the end of 2009 was apparently quiet for Moldova as the evolutions of the gas sector are concerned.
Ion PREAŞCĂ, 30 December 2009, 16:10

But stillness can be even more dangerous than the storm. Especially as there are signs of an upcoming crisis.

The debts for gas accumulated by the Thermal Power Stations and Termocom give us no reason for joy. This critical situation happens every year and is not already a surprise. The issue is that we never know when it will become more severe. For example, for many years people have been talking about an eventual overtaking of the assets of the Thermal Power Station by Moldovagaz, on account of hundreds of million lei debts for gas.

The situation of the current management of SA Moldovagaz is not exactly clear either. For instance, the visit of Gazprom vice-president, Valeri Golubev, was cancelled at the last minute. He was supposed to meet the Prime Minister Vlad Filat at the end of November and participate in a meeting of the Administration Board of the local monopolistic gas company Moldovagaz.

Ill-intentioned people say that a black cat passed between Chisinau and Gazprom. According to them, the Prime Minister insisted too much with the Russian Prime Minister Vladimir Putin to have the current president of Moldovagaz, Alexandru Gusev, replaced with a more trustworthy person for the current government. „The King of Gas", as Putin was named, did not accept the proposal of the Moldovan Prime Minister. Moreover, Gazprom was even annoyed by such a suggestion. Thus, the current manager of Moldovagaz will most probably remain in his position until the expiration of his contract at the end of 2010. Here, we have to clarify that Chisinau cannot change the manager of Moldovagaz without the consent of Gazprom. For, besides their 50% of Moldovagaz capital, the Russian concern also manages the 13.44 % belonging to Tiraspol.

The situation concerning the price for gas is also very unclear. Neither Moldovagaz, nor the Government, nor the National Agency for Regulations in Energetics (NARE) is ready to provide information about the price for gas after January 1, 2010. There are only certain forecasts.

We can say, with a greater certainty, that in 2010 we will pay more for gas, electric and thermal energy. How much more, it is hard to say. .

First of all, the import price for Russian gas will increase. The most optimistic forecasts show that it will increase by 20%, while the most pessimistic ones say that we will receive gas for a price higher by 30%. For example, IDIS Viitorul states in the last issue of the Economic Monitor that the price for gas will increase by 21% in 2010, determining an increase of the inflation rate by 0.7%. Thus, the import price for gas from January 1, 2010 could exceed 240 USD for a thousand cubic meters.

This price increase alone would be enough for NARE to increase the tariffs for natural gas delivery to end consumers. We could add to that the depreciation of the leu against the American dollar by about 10%, which took place the last time the gas tariffs were modified, at the order of the former communist government.

The fact that NARE reduced gas tariffs in September, without any justifiable base, will also contribute to the increase of tariffs.

The cherry on top of it all is the fact that new tariffs will be calculated according to the New Method of Determining, Approving and Applying Gas Tariffs, in force since October 2009. The method provides for a differentiation of tariffs, depending on the costs for natural gas procurement, transportation, distribution and delivery to each category of consumers. Subsidization of certain categories on account of other categories of consumers will also be terminated. In short, this will mean higher tariffs for household consumers and lower ones for industrial consumers.

NARE will have to eliminate the provision, according to which for the first 30 cubic meters of gas, from the monthly consumption, all household consumers, rich or poor, paid a tariff 10% lower than the real one.

In September 2009, Vadim Ceban, the director of NARE, stated that the Agency decided „from social considerations to maintain the preferential tariff for household consumers". Most probably, he will now refuse to do it as well.

The next ones to increase tariffs are electric distribution networks. Silvia Radu, director of RED Union Fenosa, states that the current tariff for electric energy (110 bani/kWh), for half a year now hasn't been covering the costs and expenses incurred by the company. Andrei Gutul, general director of RED Nord-Vest is quick to join and states that the current cost of one kWh is 123 bani, while the delivery tariff is 120 bani/kWh. According to Andrei Gutul, because of reduced power consumption, it has a cost of 129 bani/kWh in Donduseni and of 125 bani/kWh in Ocnita.

It is very interesting what will happen to thermal energy in Chisinau. After the amendments to the legislation, the tariffs will be approved by NARE. Already in November 2008, NARE estimated that the price for heating for consumers from Chisinau was to increase to approximately 800 lei/Gcal, this might be a blow to the image of the general mayor and his supporters.

We can expect significant changes in NARE as well, since after the adoption of certain amendments to the legislation, The Administration Board shall be made of 5 directors, as compared to three which are currently part of the board. We only wonder whether the current members are allowed to approve the new tariffs, or it will be let to the new directors approved by the Parliament.

We could whine about the increase of tariffs for utilities, but this is the price we have to pay for an almost total dependence on import resources, as well as for the possibility to have electric power, heating and gas in our homes.


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