Natural gas market liberalization, too hasty?

“The schedule for natural gas market liberalization for industry is too hasty and cannot be sustained by the companies. We are suggesting its postponement so that the industry has time to adapt. If authorities decide to carry on the current schedule, then the producers should be determined to bid transparently and in an undiscriminating manner all the quantities available on the free market. If only parts are auctioned, there is the risk that the rest reach only several operators with long term contracts,” said Frank Hajdinjak, CEO E.ON Romania, during a press conference.

The E.ON official also underscored the need for the natural gas transaction platforms of OPCOM and the Romanian Commodities Exchange (BRM) to be concluded with new products. “We need a spot market and a balance market. The operators need complex transaction instruments so that the liberalization becomes beneficial for the consumers.” He also stressed he is a supporter of liberalization, but at the time of approving then schedule for natural gas price increases for industry he hadn’t envisaged the huge impact on the companies. Having in view the current conditions, Frank Hajdinjak is supporting the postponement of the current schedule. He said that on the natural gas market there is no real competition, as the market is dominated by the Petrom-Romgaz duopoly, the two companies are in control of some 90 percent of the domestic production. He opined the right solution is that the entire quantity of natural gas is put on bid transparently, so that the suppliers and the consumers have free access to the domestic reserves.

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June 2017