AEI: After 1 April, electricity will be up to 120% more expensive than before the price cap. The ministry's response

Half of Romania's population will pay double the price for electricity, and 40% of consumers will pay prices around 75% higher than at present from 1 April 2025, when the price cap expires, if the authorities take no action before then.

The price of electricity after the cap will be up to 120% higher than before the cap, according to an analysis by the Smart Energy Association (AEI).

The electricity prices currently paid on average by household consumers are: |
– 0.6740 lei/kWh including VAT – for household consumers who have switched supplier in the last 2 months and consume up to 100 kWh/month;
– 0.68 lei/kWh including VAT – for household consumers who have not switched electricity supplier and consume up to 100 kWh/month;
– 0.80 lei/kWh including VAT – for household consumers who have not switched electricity supplier and consume between 100 and 255 kWh/month;
– approx. 1.28 lei/kWh including VAT – for household consumers who have not switched electricity supplier and consume more than 255 kWh/month.

These prices will most likely not change until 31 March 2025, when the bill-capping scheme expires.

Currently, the ANRE platform lists offers from only one supplier for the period after the cap, with several price options ranging from 1.30 to 1.43 lei/kWh including VAT.

The price offered for the post-cap period is 100–120% higher than the price before the cap.

Compared with the current price, tariffs will be:
1.5–11% higher for users consuming more than 255 kWh/month;
62–78% higher for Romanians consuming between 100 and 255 kWh/month;
90–110% higher than the current price for consumers using up to 100 kWh/month.

Most consumers (households) in Romania fall into the below-100 kWh-per-month consumption category, around 5 million out of a total of 9 million.

Prices will fall only through competition, lower taxation and/or lower unit costs, AEI specialists say. "We can see that, apart from the Ministry of Energy, which is concerned with this subject and with how to protect the population from price increases after 1 April 2025, but which has few legal powers to actually change things, the institutions that have the competence and capacity to genuinely influence the causes of high electricity and gas prices show no concern for this subject (the same attitude as in 2020, during the previous market liberalisation)", the association's analysis states.

ANRE, the Competition Council and ANPC in particular are the institutions that must help increase competition in the market, in order to avoid a situation in which, in 6 months, half of Romania's population pays double the price for electricity and around 40% pay prices around 75% higher than at present, AEI adds.

What the Ministry of Energy says

In a position statement sent to DigiEconomic, representatives of the Ministry of Energy state that, for household consumers in the first two consumption bands (those paying a maximum of 0.68 lei/kWh or 0.80 lei/kWh), these values may rise after the post-cap period. Also, depending on market developments, prices for businesses and for consumers using more than 260 kWh/month will remain close to the capped values.

The ministry's response:

"The capping of electricity and natural gas prices was set by the Romanian Government in the context of the energy crisis that began as the effects of the Covid-19 pandemic eased and the war in Ukraine broke out, given the situation caused by rising prices on international electricity and natural gas markets and the effects of those increases. The price cap is a temporary measure and was introduced so that the electricity and natural gas prices paid by final customers would not harm economic competitiveness or worsen the level of energy poverty.

As part of this measure, the state undertook to compensate the difference between real market prices and the capped prices set by legislation. For household consumers, the capped values were set differently according to consumption bands.

With the end of the capped prices, which, under OUG 27/2022, as subsequently amended and supplemented, will apply until 31 March 2025, consumers will have to pay market prices which, depending on developments, may be higher or lower than the capped ones.

For household consumers in the first two consumption bands (those paying a maximum of 0.68 lei/kWh or 0.80 lei/kWh), these values may rise after the post-cap period, given that the capped value was set at a substantially lower level than the real market value. Depending on market developments, prices for businesses and for consumers using more than 260 kWh/month will remain close to the capped values.

The Ministry of Energy has currently set up an inter-institutional working group, which is analysing the measures the Government could implement to provide post-cap support for vulnerable consumers, in line with European provisions."