“In Romania, gas and power market demand is anticipated to remain under pressure,” Petrom said in its 2013 financial report Wednesday.
It said the government’s gas price liberalization calendar for 2014 includes four domestic gas price increases for both households and non-households.
“In the power market, prices are expected to be under pressure due to supply dynamics, with additional capacity coming on stream from renewables, as well as low electricity demand, which reflects, in part, prospective energy efficiency measures,” the report noted.
Petrom produced 2.74 terawatt-hours of electricity at its Brazi power plant in 2013, covering around 5% of the country’s total output.
The company estimates its refining margins and marketing volumes will be further challenged by high prices of international crude and oil products, a marginal economic recovery in its region of operation and by a series of fiscal measures, particularly in Romania.
“With regard to the regulatory and fiscal environment, we anticipate discussions with respect to the implementation of the gas deregulation calendars and the extraordinary taxation measures introduced at the beginning of 2013 with a view to be applied until the end of 2014, which will have an impact on our financial results,” Petrom said.
In particular, a newly introduced tax of 1.5% on the gross value of special construction is expected to have a direct negative impact on Petrom’s operating costs in all segments, as well as on the company’s investment projects.
Petrom reported a 22% increase in its net profit to a record 4.82 billion lei (EUR1.07 billion) in 2013, fueled by favorable crude oil prices and lower costs.
However, the company’s sales fell 8% on the year to RON24.2 billion, largely due to lower sales of crude and oil products. The decline was partly offset by higher electricity sales. (EUR1=RON4.4873)