Confederation of Patronages of Moldova will ask Government to resume talks on natural gas. IPN economic analysis

The National Confederation of Patronages of the Republic of Moldova (NCPRM) will solicit to the Government, depending on the economic-financial situation of the enterprises consuming gas in the production process, to resume talks on natural gas, in order “to find together solutions not only for the businessmen but for the whole society”, Adrian Axente the Executive Director NCPRM told Info-Prim Neo. According to him, immediately after signing the agreement on natural gas deliveries at the price of USD 160 per 1 thousand cubic meters, the Government must determine its priorities regarding the development of the national economy and establish the areas which will be provided with serious and significant facilities. The Government must examine and propose another import sources than the Russian ones so that Moldova would not be depend so much on Russia, the patronages say. Because the prices for natural gas will continuously increase, the Government must find alternative energy sources, as sun, wind or bio-energy, “areas unexplored by Moldova because of the lack of funds”, Axente states. In this context, the quoted source denies the affirmations of some economic analysts who consider that crude oil and coal could be alternative sources for natural gas because “importers will never offer alternative prices”. The representative of the patronages considers that the increase in price of the natural gas will affect the national economy but the most affected will be the final consumers and those who use natural gas for cooking or heating. Some enterprise will also be “on the edge”, especially those who include a great share of the energetic consume in the cost of the production. At the moment, the enterprises estimate this share in the final cost of the products so that the impact will be known later, the quoted source said. “In the case of some enterprises, natural gas constitutes 5% of the cost, at the Power Plants this share amounts to 30-40%, and this is the reason why a concrete evaluation for each area of the economy is needed”, Axente declared. Asked about the effects of the increase in price of natural gas over the profitableness of the enterprises, Axenete said that everything depends on demand and supply. “Price increases will not be felt directly by the owners of the enterprise, but will be included in the final cost. It means that the final products will be bought by consumers at a higher price”. In this way the increase in price affects only final consumers and the efficiency of the enterprises, because in case local products are not as competitive as the imported ones, it will become less competitive when the prices for natural gas will go up. Also, if the price for industrial products will increase, they might not be purchased and in this way the stocks will grow, concomitantly with losses of the enterprises, Axente declared. According to Axente, the situation of the producers becomes more difficult due to the fiscal policy applied by the state which also contributes to the increase in price of the final production. According to Axenete, the only financial source that could support the activity of the enterprises consuming natural gas would be the state budget and only in case of reducing administrative expenses and making more efficient the activity of Fiscal Inspectorates on collecting duties from tax payers.