ECO-BUS WEEKLY DIGEST October 11-16. Most important Economy & Business news by IPN

MONDAY, October 11

Chisinau makes 12.3 million lei on another round of kiosk concessions

The sixth round of an open bidding process for kiosk concessions has fetched the Chisinau municipality a total of 12.3 million lei, the City Hall said in a press release.

Ten concessions were awarded during the latest round, with the most expensive being a 3.1 million lei permit for opening a coffee and pastry booth on 13 Zelinski Street in Botanica. Higher-than-average sums were also offered for a booth on 84/6 Albișoara Street (2.9 million lei) in Riscani, and another one in the Metropolitan Cathedral Square (2.3 million lei) in central Chisinau.

Andrei Spinu: No reasons for concern at the moment

The energy crisis in Moldova is part of a broader crisis that affects prices and supply of natural gas throughout Europe and the world, Deputy Prime Minister Andrei Spinu told a press conference upon his return from St. Petersburg, Russia. “There are no reasons for concern at the moment”, he stated.

The Moldovan official met with Elena Burmistrova, vice president of the Gazprom Management Committee. “We discussed an increase in gas supplies to our country in October, so that no consumer – individual or corporate – is affected”, said Andrei Spinu.

In St. Petersburg, the deputy prime minister also discussed electricity supply, “which has been a hot-button topic in recent days, with concerns appearing that consumption could be reduced.” “I have made sure that we do not face a crisis. In fact, there is no cause for concern at the moment. Electricity is supplied at levels that ensure energy security,” stressed Andrei Spinu.

This week, teams from Gazprom and Moldovagaz will begin talks on a work plan. “I wanted to emphasize that the price of the formula currently in use, in October, is not justified and is unrealistic for Moldova. It is not in line with the contracts previously signed between Moldovagaz and Gazprom. We asked for an extension of the contract on the older terms, so that we can continue in parallel to discuss issues on our common agenda”, said Andrei Spinu.

“Whatever the situation, we have a plan for any eventuality, which will be implemented with full responsibility by the Government”, said the deputy prime minister. The plan is based on two elements: the first centers on the plan to sign a long-term gas supply contract, with the best price for Moldova and that ensures the country’s energy security. At the same time, discussions are taking place with development partners to identify alternatives for gas supply. “We are preparing reserve fuel, being ready to use alternative fuel and, if necessary, reduce gas consumption”.

The second element concerns providing aid for people. “We are working on developing social packages for the winter for families and socially vulnerable people, including the industries that will be most affected.” The deputy prime minister said that the households that will need help have been identified based on previous consumption records. “The most vulnerable will receive more help”, said Andrei Spinu.

TUESDAY, October 12

Victor Parlicov about gas crisis: It is an attempt by Gazprom to give us a political lesson

The absence of progress in the negotiations on the contract for the supply of gas shows that Gazprom tries to give us a political lesson, stated the former director of the National Agency for Energy Regulation Victor Parlicov. According to him, Moscow wants political decision makers from Chisinau to become involved in the talks. Economic expert Veaceslav Ioniță considers that, depending on the success or failure of the negotiations between Chisinau and Moscow, the natural gas tariff for end users will rise by at least 30%, IPN reports.

Victor Parlicov noted there are reasonable suspicions that the current gas crisis faced by the Republic of Moldova was planned by Moscow with the involvement of decision makers from the left side of the Nistru. The Kuchurgan Power Station’s announcement concerning possible halts in the supply of electricity wasn’t accidental.

“This crisis was prepared by the Russian Federation and the Transnistrian region. The Kuchurgan Power Station purchased coal reserves and switched over to coal partially. But the coal needs to be paid, unlike the gas that is delivered there for almost nothing. It is an attempt to give a political lesson, to force the Moldovan authorities to move towards direct political discussions. Gazprom showed that it wants to discuss with the Premier or with the President,” Victor Parlicov started in the program “Emphasis on Today” on TVR Moldova channel.

For his part, economic expert Veaceslav Ioniță said no matter what the end result of the talks between Chisinau and Moscow is, the consumers of the Republic of Moldova will not be able to avoid a rise in the natural gas tariff, which can be even doubled.

“The tariff will rise by 30% to 100%. We now have a tariff of 4.20 lei and it could be increased to 5.5-9 lei. In the worst case, the Government will have to cover half of the rise by way of compensation, up to a consumption of 100 m3 a month, which applies to the largest number of consumers. The annual financial effort will be then of 600 million lei that will need to be covered with state budget funds,” stated Veaceslav Ioniță.

The contract for the supply of gas between MoldovaGaz and the Russian giant Gazprom expired on September 30 and was extended for a month. The price of gas for October was agreed at US$790 per 1,000 cubic meters. Deputy Prime Minister Andrei Spînu said that in the negotiations with Gazprom, Chisinau insists on the prolongation of the old contract with the old tariff calculation formula.

Igor Grosu about contract with Gazprom: We are analyzing alternative options

Parliament Speaker Igor Grosu said the Republic of Moldova banks on pragmatic relations with the Russian Federation and aims to extend the old contract for the purchase of gas. According to Grosu, the discussions with the Russian side necessitate patience and calmness. Until the end of this month, the negotiations are expected to produce a result. However, the government is considering alternative scenarios if the discussions with Gazprom end in failure, IPN reports.

The Speaker noted that Moldova’s delegation is having a dialogue with the Russian side so as to obtain the best purchase price. There are no reasons for concern about a halt in the supply of electrical energy even if the Kuchurgan Power Station warned about possible interruptions.

“We want a contract with Gazprom to be signed until the end of this month, with a good price. This will mean the continuation of the terms of the contract we had until now. The discussions continue. Gazprom broached again an older subject – the historical debt of US$450 million of the right side of the Nistru, which accumulated in unclear conditions. We do not speak about the debt of the Transnistrian region. Patience and calmness are needed. There is no danger that we will remain without electrical energy. The so-called warning of the Kuchurgan Station is unfounded,” Igor Grosu stated in the program “In Depth” on PROTV Chisinau channel.  

The Speaker noted that the Ministry of Labor and Social Protection will provide aid to the socially deprived groups so as to help the people with low incomes to pay the gas bills. However, if a consensus is not reached with Moscow, Moldova has alternative scenarios.

“We want to have pragmatic relations with the Russian Federation. The international context favored the surging of prices. We hope to persuade them that we are a correct payer. We want this contract to be extended. We are also analyzing alternative options if a compromise is not achieved, including the assistance of the neighboring countries Romania and Ukraine. There are a number of supply ways. The most important thing now is to negotiate the volume and to bring gas on time,” stated Igor Grosu.

Earlier, MoldovaGaz said it will ask the National Agency for Energy Regulation to increase the average gas tariff for end users by 35%. Deputy Prime Minister Andrei Spînu said the negotiations with Gazprom are difficult as the Russian side insists on Moldova’s historical debts to the Russian gas giant.

Oil sellers obliged to report prices for next day to NAER

The Natural Agency for Energy Regulation (NAER) made again changes to the methodology for calculating and applying the prices of oil products. The business entities will be obliged to report the retail prices of all the oil products for the next day to the Agency. The information will be presented on each workday, for each filling station, until 4pm, through the agency of an electronic platform, IPN reports.

In the October 12 meeting, Andrei Adam, of NAER, said the Agency undertakes to ensure public access to information about the address of each filling station and the prices set by the stations. Through this platform, the data can be sorted according to such criteria as “lowest price” and “location”. The authors of the draft decision aim to offer the consumers a simple instrument for identifying and choosing the most advantageous fuel seller in a particular area.

The law on the oil products market provides that the operators can also retail other types of oil products than those for which price ceilings are set, on condition that the main oil products of the standard type are also sold at the same filling station. If gasoline “95” is not sold at the station, the sale of another type of gasoline, like “98” or with different additives, is not allowed there, stated Andrei Adam.

WEDNESDAY, October 13

Financial Times: Moldova requests EU help after Gazprom reduces gas flow

Moldova is requesting emergency gas supplies from EU countries after Russian state-controlled exporter Gazprom slashed its shipments to the country amid a wider European gas crunch, IPN reports, quoting the Financial Times, the world’s leading global business publication.

The publication says that the former Soviet state of 2.6m people is seeking a deal to supply more gas via Romania to alleviate shortages and surging prices after a supply contract ran out last month, according to two people involved in the talks.

Officials are unwilling to agree to new terms with Gazprom at a significantly higher price. Supply to Moldova, wedged between Romania and Ukraine, has fallen by around one-third while prices have shot up from $550 per thousand cubic meters last month to $790 this month — nearly five times the average that the country paid last year.

The prices are “not justified and not realistic for Moldova,” deputy prime minister Andrei Spinu said on Monday. Spinu said Moldova was negotiating with Gazprom over a new contract but was also exploring “alternative ways to supply gas” from Russia, Romania, Ukraine and other EU countries.

Moldova, caught in a tussle for influence between Moscow and the west, elected Maia Sandu, a staunchly pro-EU president, last year. Her party won a landslide victory in July’s parliamentary elections. “The amounts of gas involved are very small for a company of Gazprom’s size, but they are significant for Moldova,” said Aura Sabadus at market information service, ICIS. “The most plausible explanation for their action is that Moldova has a pro-EU president and government and Russia is happy to use this situation to pressure the country.”

The shortage comes as Europe wrestles with skyrocketing gas prices blamed on strong demand globally and an unwillingness by Gazprom to provide additional supplies to the European market beyond those secured through long-term contracts.

Moldova has long been susceptible to over-reliance on Moscow, its former imperial and Soviet capital. It relies entirely on a pipeline from Russia through Ukraine for its gas needs, although a gas connector with Romania will start to operate this year after construction finished last week. Moscow has also regularly imposed trade embargoes on Moldovan exports, such as wine, while Russian troops are the de facto security guarantors for Transnistria, an unrecognized breakaway state on the country’s eastern border with Ukraine.

FRIDAY, October 15

Romanian MEPs: Romania will help Moldova to overcome energy crisis

In the eventuality of the negotiations on a new contract with Gazprom failing, Romania will not abandon the Republic of Moldova and will help it overcome the energy crisis, assured Romanian MEPs Eugen Tomac and Rareș Bogdan, who are in Chisinau on an official visit. The Romanian MEPs said that Bucharest is looking for solutions to offer the Republic of Moldova crude oil and is considering technical possibilities for supplying natural gas through the Iasi-Ungheni-Chisinau gas pipeline, IPN reports.

According to the Romanian officials, Romania will not abandon the Republic of Moldova in winter if the discussions with Gazprom reach a deadlock and the country faces a real natural gas crisis.

‘The whole Europe is going through this energy crisis. It is a crisis with a lot of undertones, with economic and political interests. We must say it directly – Russia manipulated considerably with the price of gas, exerting incredible pressure on all the states that purchase gas from it. The citizens must know that in crisis situations, the Republic of Moldova will not remain alone. Romania is ready to share what it has with the Republic of Moldova so that we together overcome this winter,” Eugen Tomac stated in the program “Emphasis on Today” on TVR Moldova channel.

According to the Romanian MEPs, Romania is examining the possibility of offering important quantities of crude oil and of delivering natural gas to the Republic of Moldova through the Iasi-Ungheni-Chisinau gas pipeline that became fully operational two weeks ago.

“We had discussions with the Minister of Energy of Romania Virgil Popescu so that Romania directly supports the Republic of Moldova given the harsh negotiations held now in the Eastern area. If the discussions fail, Romania will stand ready to help the Republic of Moldova with gas through the Iasi-Ungheni-Chisinau gas pipeline and also with crude oil. We also talked to Romanian investors that want to cross the Prut now that there is a new government in Chisinau,” stated Rareș Bogdan.

The Commission for Exceptional Situations two days ago declared a state of alert in the energy sector following the difficulties faced in the negotiations on a new contract for the purchase of gas held with the Russian gas giant Gazprom. The previous contract was extended for October and Moldova now pays US$790 per 1,000 cubic meters of natural gas.

Diesel fuel prices up 2 lei, gasoline and liquefied petroleum gas up 1 leu since September

Since the start of autumn, fuel prices have followed an upward trend. A liter of gasoline “95” grew by 1.20 lei more expensive, while a liter of diesel fuel – by over 2 lei. The price of liquefied petroleum gas is now by 1 leu higher than at the beginning of September, IPN reports.

At the start of September, a liter of gasoline “95” cost 20.23 lei, while for October 16-18, the National Agency for Energy Regulation set a price ceiling of 21.45 lei. A liter of gasoline cost 16.42 lei at the start autumn, while for the next three days the price is 18.46 lei/liter.

The Agency does not set ceilings for the price of liquefied petroleum gas, which also grew more expensive. At the start of September, a liter of liquefied petroleum gas was sold for 12.07 lei, as opposed to 13.15 lei at present.

In a press release, NAER said the higher prices stem from the tendencies witnessed on the international market amid the continuous rise in the global demand for oil and oil derivatives. The prices of gasoline and diesel fuel reached a record high for the last few years on the international market.

Under the changes made by the Agency to the methodology for calculating and applying the prices of oil products, the business entities will be obliged to report the retail prices of all the oil products for the next day to the Agency. The information will be presented on each workday, for each filling station, until 4pm, through the agency of an electronic platform. The Agency undertook to provide a technical solution to ensure the functionality of such a platform within three months.

Balance of trade deficit at US$338.9m in August

Moldova’s exports of goods in the first eight months of this year came to US$1.808,7 billion, an increase of 18.6% compared with the corresponding period of 2020. Imports grew by 32.5% to US$4.403,5 billion. In such conditions, the balance of trade deficit in August was US$338.9 million, up 17.9 million on July 2021 and up 69.2 million on August 2020, IPN reports.

According to the National Bureau of Statistics, exports of national goods in January-August added up to US$1.341,3 billion, which is 74.2% of all exports. Re-exports totaled US$467.4 million, which is 25.8% of the exports.

Experts of goods to the EU Member States (EU–27) in the first eight months of this year came to US$1.132,0 million, representing 62.6% of the total exports, which is a decline of 2.4 percentage points compared with January-August 2020. Exports of goods to the CIS countries added up to US$282.4 million. This is 15.6% of the exports and a decrease of 0.6 percentage points compared with January-August 2020.

In the period, imports of goods from the EU Member States (EU-27) totaled US$2.050,1 billion, while those from the Commonwealth of Independent States - US$1.051,1 billion.

The considerable discrepancy between exports and imports led to a balance of trade deficit of US$2.594,8 billion in January-August this year, up 44.3% or 796.1 million compared with the same period of 2020.

The balance of trade with EU-27 in eight months ended with a deficit of US$918.1 million, while with the CIS – with a deficit of US$768.7 million.

Technologies to weigh moving units of transport to be implemented in Moldova

Representatives of the Czech company Incinity have announced the completion of the feasibility study for applying in Moldova technologies to weigh heavy trucks in motion. “The platform of intelligent traffic technologies INVIPO is a modern instrument that will increase road safety and will optimize road maintenance costs. We will offer the necessary support so that the project is implemented as soon as possible,” caretaker director general of the State Road Administration Sergiu Bejan stated in a meeting with representatives of the company, IPN reports.

The interlocutors discussed the implementation of the platform of intelligent traffic technologies INVIPO, including the extension of the system by adding the weighing of moving heavy trucks, and the possibility of recording in real time the violations committed by heavy truck drivers so as to ensure road safety and security and to guarantee the durability of national roads by preventing their damaging.

The platform of intelligent traffic technologies INVIPO is a contemporary instrument that will collect information about the weather, traffic, weighing of heavy trucks in motion and variable message signs. It will also include a dashboard of the operator for the State Road Administration and a public dashboard on which information about the weather and traffic conditions will be provided for drivers and pedestrians, runs a press release of the State Road Administration.

SATURDAY, October 16

EU grants for SMEs to boost investment in the Black Sea blue economy

The European Maritime, Fisheries and Aquaculture Fund (EMFAF) has launched a call for SMEs and start-ups from the Black Sea region, including Moldova, Georgia, and Ukraine, IPN reports, quoting  EU Neighbours east, a source of the European Commission.

Proposals will bring together blue economy stakeholders in EU and eligible non-EU Black Sea countries to identify and tackle local capacity building needs to boost innovation, digitalisation and investment in the Black Sea blue economy.

Proposals must be submitted by a consortium of at least three applicants, including at least two eligible non-EU countries and one EU country. All three applicants should be participants of the Common Maritime Agenda for the Black Sea.

Proposals should primarily focus on coastal and maritime tourism, fisheries and aquaculture, and maritime transport, shipbuilding, blue biotechnology, marine renewable energies, etc. Proposals may also explore the potential for SMEs/start-ups in the development of ports as blue economy accelerators. EMFAF will provide from €300,000 to €500,000 per project. The deadline for applications is 12 January, 2022, the European Commission has announced.