Domestic gas prices alignment

This month, the Ministry of Economy has to submit to the EC a plan that would outline how the domestic gas prices are going to be gradually increased in order to be aligned with the import price level. According to the ANRE, the Treaty of Accession to the EU does not mention that Romania has to align the domestic gas prices. What it stipulates however is that the domestic price has to be set at a level that covers the production costs. The only document that speaks about gas price alignment is Romania's Energy Strategy for 2007-2020, which does not set however a specific schedule. In our opinion, Romania's authority position with respect to domestic gas price alignment is confusing and makes it hard to project the gas revenues for Petrom (SNP), which is second largest gas producer in Romania. We regard the news as negative and expect a negative market reaction.

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