Romania’s energy market regulator ANRE approved as a principle, under a proposed regulation inked but not yet enacted, a 2.5% increase in the electricity distribution fees charged by electricity distributors.

This increase would cover the 2% turnover tax that electricity distribution companies should pay according to the Government's emergency ordinance (OUG) 114/2018. The fees charged by the distribution companies will rise by 2.5% as of March 1, if the regulation is enacted, local Adevarul reported.

Distribution companies are also allowed to recover financial losses incurred in the past years, in addition to the 2% turnover tax they are supposed to pay as of January 1 this year. Although the regulation regards only the electricity distribution companies, it is likely that the principle will expand to the gas distributors as well. Thus, the natural gas price for end-users will predictably rise as an effect of the same OUG 114.

However, the turnover tax came under criticism from the junior ruling party, the Alliance of Liberals and Democrats (ALDE), and might be amended. ANRE has suspended the procedures for charging the 2% turnover tax until the lawmakers, currently debating OUG 114, make a final decision. This is not going to be very soon, though, since it is the Chamber of Deputies and not the Senate (which currently debates the topic) that is supposed to make the final decision.

The senior ruling party, the Social Democrat Party (PSD), which authored OUG 114, does not hold the majority in the Chamber of Deputies and even the core ruling coalition (PSD+ALDE) holds a volatile majority.

editor@romania-insider.com

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