Gas ’more expensive’ for industrial consumers

The Government decided two weeks ago that gas prices for industrial consumers will be increased by 10 percent strating with 1 July.

Population is exempt for the moment from similar increases until April next year, according to the Government.

The increase in the import gas price, from 290 dollars per thousand cubic meters as it was two years ago to 450 dollars as it is now, was used by the authorities to jutify the measure.

To maintain the proportion between the quantities imported and the domestic production, from now on companies will use especially gas from abroad, while the population will consume domestically produced gas, which is much cheaper.

Even if the population is not directly affected by the higher natural gas prices, the indirect effects can be higher costs to various products.

Companies will be able to have more expensive services and products for individuals in order to absorb the increased price they pay for gas.

Authorities say the impact of the new gas price increase for companies on the finished product is quite low and focuses more on the formal decision, according to which the population is exempt from a rise similar as Emil Boc said when approving this decision.

“This means a lot for the Romanian citizens that still do not have a salary level that many of us would want to reach. So, it's a big decision for the economy of each family’, Emil Boc said .

The increase will be reflected in the price of other products

Those who will not be exempt from the new increase represent 40 percent of the market .

The rest of 60 percent will not be affected.

Money collected from the first category will go to investments that gas suppliers and distributors have to make to streamline the sector.

Businessmen argue that people will still suffer because the new increase will be reflected in final prices of products from different categories.

‘Productive sectors directly affected, starting with the fertilizers production, which we will experience as prices increase next year, when more expensive fertilizers will be used in agriculture, and ending with food industry, which by using gas energy will have to introduce in their prices at least partially the unjustified gas price increase.’

‘All the manufacturing processes of meat and dairy products are made ​​through thermal processes, which in most cases are based on using natural gas’, said the Secretary General of the Association of Businessmen, Constantin Pârvan.

Things do not stop there.

A new gas price increase, also for industrial consumers will be applied in the fall.

This will be of 15 percent, so food price increase will certainly take place, although not as significant as expected.

Translated by: Denisse-Meda Bucura

MA Student, MTTLC, Bucharest University