Gas rates will rise, but not as much as Moldovagaz wants

In two weeks the National Energy Regulatory Agency (ANRE) is to decide on Moldovagaz's request for an 21.2% increase in the gas tariff, but it is likely that the request will not be fully satisfied. ANRE director Victor Parlicov said that Moldovagaz requested the raise in light of the rise in the price of the imported gas, which reached in the third quarter $367 per one thousand cubic meters. However the price estimated by Moldovagaz for the fourth quarter is over $400. Moreover, Moldovagaz's estimates use a conversion rate of 12.05 lei per $1, which is higher than that established by the central bank (11.29 lei on September 6). The current tariff was calculated using an average gas price of $305 and a conversion rate of 12.3 lei per $1. “Hopefully in two weeks we will be able to make a decision so that it can enter into effect by October 1 the latest. Any delays with adjusting the tariff create financial deviations which eventually have to be covered by the final consumers”, said Parlicov. Parlicov admitted that even a slight increase in the gas tariff would be troubling for many families, and not only for the vulnerable ones, especially since it will also entail higher electricity and heat rates. He said that the estimates would be submitted to the Government for a subsequent revision of the compensation benefits paid to vulnerable families. Until recently, the ANRE examined tariff adjustments only after Gazprom announced, on a quarterly basis, new gas prices, as provided by a 5-year agreement signed with the Russian gas supplier. It is for the first time that the ANRE considers a quarterly tariff raise based on local Moldovagaz estimates, and experts explain that it is due to the fact that the old agreement with Gazporm expires in December 2011 and negotiations on a new one are underway.