Internal price range for gas would be lower if an adequate tariff policy existed. IPN Economic Analysis

The economist Veaceslav Ionita, considers that if an adequate tariff policy were in place, at the buying price of USD 160 for 1 k cubic meter the maximum internal selling price would be MDL 2,2-2,5, compared with the actual figure of MDL 2,8, agreed on Wed by the National Agency for Energy Regulation (ANRE). In the analysts’ opinion, it is awkward that an increase in the import expense by 45% has generated a higher tariff for consumers, by 50%. “It is clear that the fluctuations of USD currency do promote tariff increase, but not in that manner”, declares Ionita. Nobody has asked why the new gas tariff is doubling from 27 to 54 bani, the distribution and logistics expenses within the country, carried by “Moldova Gas”, where there is no sign of increase in employees’ wages, nor “the pipes got dearer”. Now “Moldova Gaz” is in an odd situation, where there is no enough variance between the selling and buying prices from “Gazprom”. The organization is registering losses, which are recovered only by gas transportation within the country, as well as by citizens, who pay the highest price, while the tariffs applied to CET (Thermo-Electric Stations) are 29 % lower than the buying price, declares Ionita. This tariff variance has the only logical explanation that CET buy gas in bulk, declaring that this was a common practice during `90s, when it was believed that national energetic security depends on domestic production, an idea which has no real grounds, according to Ionita. On one hand, ANRE agrees that CET distribute at lower prices, which are covered by the population, and on the other hand the electric energy distributors are obliged to buy the energy produced by CET, which is very expensive. He declares that Union Fenosa and other distributors prefer to buy energy from Ukraine, which is 20-30% cheaper than from CET. Even if Ukraine decides to increase the price up to 3 cents per kwh, Ukrainian electricity would be less expensive than CET’s, which tariffs are soon to be announced. At present, CET1 sell to UF electrical energy at a price of 43,6 bani, CET2 37,5 bani, CET North 40,37 bani. According to Ionita, a careful examination of CET’s condition can lead to increase of 55-60 bani. These can force UF to demand an adjustment of selling tariffs from 78 to 90 bani, declared the analyst. Taking into account the increased speed of tariff regulations, a new energetic tariff from CET to UF can be agreed by Aug and for final consumers by Oct. In the same tariff increase context Ionita declares that CET tariff to Termocom can be increased up to 30% The tariff for heating has a very small probability to rise, as it is agreed by the Municipal Council. “CET are the parasites of the energetic complex”, especially that they benefit of a preferential tariff for gas, which is of course at the populations expense, stated Ionita. The obsolete equipment is the main cause of reduced efficiency and generates additional losses. Regarding the investment of Russian capital in RM energetic sector projects, Ionita declared that a partnership with Russians can be risky, based on the simple reasoning that they participated in the privatization of wine making organizations, where the result is obvious. On the other hand, only Russians can take the risk of investing in RM`s energetically objectives, because they are the ones who know the situation very well. A contract with Gazprom is useful only from the point of view that that it will ensure continuous energy supply. Regarding price policy, according to the source, the contract assumes the right to fix prices every year. This can lead to a price increase even next year, declared Ionita, cited by Info Prim. ANRE established a new tariff for supplying gas to the final consumers of MDL 2335 for 1k cubic meters, a 50% higher than the present one MDL 1553. For private consumers, who use less than 30 cubic meters the tariff was increased from MDL 1460 to 2812 for 1 cubic meter. Tariffs for natural gas for power stations were increased from MDL 1160 to 1745, and for heating stations from 1368 to 2057 per 1k cubic meter.