The conception of the new methodology for applying fuel prices, worked out by the National Agency for Energy Regulation (NAER), is welcome in the current conditions, but a more attentive calibration of all the variables included in the formula is needed, considers Vadim Gumene, programs director at the independent think tank “Expert-Grup”. In a comment, the expert says that such initiatives necessitate very thorough reasoning based on empirical estimates, by including models and scenarios that would anticipate the modification of the statu-quo, IPN reports.
The comment author says the current methodology turned out to be inefficient in the process of regulating the oil products market of Moldova. In this connection, the necessity of amending the regulatory framework by working out methodology that would exclude useless regulations and provisions becomes evident. This would also lead to its simplification, simultaneously with the possibility of imposing an autonomous character in case of applicability and of increasing the role of independent regulator in the field.
Thus, the new methodology suggests that the highest retail prices of oil products should be calculated based on the Platt’s Mediterranean quotations as namely these are the reference prices for most of the transactions with oil products in the area. The price for liquefied petroleum gas will be calculated based on the Argus DAF Brest propane-butane mix quotations.
Vadim Gumene considers that theoretically, the modifications will limit the reticence of oil companies to the evolutions of quotations on the regional stock exchanges. This fact, in virtue of the deficiencies of the competition and regulatory framework in the sector, allow using inequitable methods for calculating and adjusting the retail prices of oil products.
However, even if apparently the given initiative matches the logic of the new approach in terms of determination of the prices of oil products, this is not accompanied by substantiation based on models or scenarios. Moreover, the enunciation of the use of coefficients/indicators is not enough without their approval by empirical methods, stated the expert.
