Electricity, natural gas and fuel consumption therefore ended the first half in decline, and full-year forecasts do not point to any rebound thereof. The gaps to 2008, the last year of economic boom of the Romanian economy, are now harder to narrow, especially when it comes to electricity and natural gas consumption. The introduction of taxes out of the blue, such as happened with the EUR0.07 excise duty per liter of fuel, the implementation of the gas price deregulation schedule and the shutdown of major industrial consumers are making an impact on the performance of the most important local energy markets.
Data from Romania’s energy market watchdog ANRE show that domestic electricity consumption stood at 24.1 TWh in the first half, 3.2% lower than in the year-ago period, and the institution expects a 2.6% full-year decline.
Even though the decline slowed down a bit, 2014 becomes the third year of decline in electricity consumption in a row, after the slight rebound of 2010-2011. Romania’s economy will use 48.38 TWh this year, over 11% fewer than in 2008.
The most affected of all consumer categories were the non-household captive consumers, which include small businesses.
The electricity consumption trend used to be coordinated with the trend of the economy, but the two indicators have been out of sync since 2012. The reason for this is that Romania’s economic growth relied on industries that are not energy intensive.
While domestic consumption went down, electricity production increased in the first half, because of export opportunities in Serbia and Hungary. Romania exported 2.9 TWh of electricity in the first half, five times more than in the first half of 2013, according to ANRE.
Natural gas consumption fell by 4.7% to 6.5 billion cubic meters (69.7 TWh equivalent) in the fist half, and one of the factors in this decline was the implementation of the domestically drilled gas price deregulation schedule, which made Romanian natural gas 32% more expensive than in the year-ago period, according to the country’s largest producer Romgaz (SNG.RO).
“Therefore we can estimate that consumption of natural gas and implicitly import of natural gas on the overall market will decline given the rise in prices,” ANRE representatives said.
This is the third year of natural gas consumption decline in a row, too. While Romania’s economy needed 15.5 billion cubic meters in 2008, last year it used 12.5 billion cubic meters, almost 20% fewer. If the trend of the first half maintains, 2014 consumption will reach 11.9 billion cubic meters, which makes Romania almost free of Russian imports. The price it pays, however, is a 30% lower industrial consumption than in 2008.
The fuel market declined, as well, in the first half, with demand dealt a heavy blow by the introduction out of the blue of the additional EUR0.07 excise duty per liter as of April 1.
Last week, OMV Petrom (SNP.RO) said that according to the data it had, demand shrank by almost 3% due to the new taxes and to the fiercer competition on the market. Kinga Daradics, chief executive officer of MOL Romania, the fourth largest fuel business in this country, too said the market shrank by some 2%, according to the data the company had, so fuel demand would see another year of decline.
Romania uses about 5.9 million to 6 million tons of fuel a year and sales reached EUR9.5 billion in 2013.
(English version by Loredana Fratila-Cristescu)