Stopping the massive increase in gas prices for population can only be achieved through a functional market

by Dumitru Chisalita

According to the Gas Law, consumers will be able to have a fair treatment, in a competitive market, which can be achieved only by ensuring conditions of competition and transparent and non-discriminatory access of buyers to the gas amounts offered on the competitive market.

According to a press release of ANRE, the gas market in Romania must ensure price references based on supply and demand, leading to fair competition among operators in the gas sector, in favor of consumers.

According to the Intelligent Energy Association, which has repeatedly shown that stopping the massive increase in gas prices for population can only be achieved through a functional market.

Although at declaratory level there are no divergent points, actions taken are different and in contradiction with legal provisions. The Intelligent Energy Association supports the need to comply with the obligations established by the Gas Law and the preparation in emergency regime of General rules on the gas market, ensuring:

1. A truly competitive gas market (on the centralized market and on the market for bilateral contracts)

• Gas suppliers should be forced to come up with gas offers in line with their own Best Practice Guides for Selling Gas in a Competitive, Transparent and Non-Discriminatory Manner.
• Gas suppliers should be obliged to regularly conduct self-assessment reports on how the offers are made and make proof that they are carried out in line with the Best Practice Guides.
• Suppliers should be obliged to make gas offers in line with demand in the market, at least in terms of quantity packages, guarantee conditions, payment terms etc.
• Suppliers should be obliged to provide public reports analyzing monthly, quarterly, half-yearly and yearly the requests for offer received, respectively the requests for offer in the market, and adapt its offer to the entire range of requests for offer according to its own algorithm, publicly motivated.
• Suppliers should be obliged to periodically prepare self-assessment reports and make proof that their offers in the market are in line with the requests for offer in the market.

2. Realconditions of transparent and non-discriminatory access of buyers to the gas amounts offered on the competitive market

• the obligation of each supplier to publish on its own website the Best Practice Guide for Gas Acquisition in a Competitive, Transparent and Non-Discriminatory Manner, containing how the supplier will purchase its gas. These Guides aim to ensure transparency of its gas purchase intentions for multi-annual, annual, half-yearly, quarterly, monthly and daily periods. Best Practice Guides must substantiate each intention established.
• If gas is purchased for population, the Supplier should be obliged to additionally establish under the Best Practice Guides how gas purchased for population is the one purchased in conditions of minimization of cost of resources allocated and, at the same time, the supplier allows the equal and non-discriminatory treatment of persons participating in the gas procurement procedure, as bidders.
• the obligation of each supplier to publish on its own website the Best Practice Guide for Gas Sale in a Competitive, Transparent and Non-Discriminatory Manner, containing how the supplier will sell its gas. These Guides aim to ensure transparency of its gas sale intentions for multi-annual, annual, half-yearly, quarterly, monthly and daily periods. Best Practice Guides must substantiate each intention established.
• the obligation of each supplier to publish on its own website regular reports to prove how it implemented the elements self-imposed under its own Best Practice Guides for Gas Acquisition/Sale in a Competitive, Transparent and Non-Discriminatory manner in the acquisition and sale of natural gas, while presenting the reasons why it has not fulfilled its objectives.
• the supplier’s obligation to establish Procedures to ensure the conditions of transparent access to gas in its portfolio for any potential customer.
• the supplier’s obligation to implement an electronic public system in which to register any request for gas sale addressed to the supplier (date of receiving the request, delivery point, quantity, requested price, date of resolution, how it was resolved).
• the supplier’s obligation to regularly prepare public self-assessment reports to prove how the Procedures that ensure the conditions of transparent access meet the public needs and how its behavior as supplier is in line with the requirements of transparency and non-discrimination.

The Association believes that this approach is the only one complying with the legislation in force and aims to ensure price references based on supply and demand, leading to a real fair competition of operators in the gas sector in favor of consumers.

Note: Fair competition is defined by some authors as being the prefect competition. The gas market in Romania tends to normality, which should go through the current realities, before becoming “perfect”.

Translation from Romanian by Romaniascout.

Image courtesy of Keerati at FreeDigitalPhotos.net