Tuesday, August 14, 2012

Romania to tax energy producers gaining from price deregulation

BUCHAREST, Aug 14 (Reuters) - Romania's leftist government plans to impose an additional tax from 2013 on electricity and gas producers that stand to gain from the approaching deregulation of energy prices, deputy Finance Minister Liviu Voinea was quoted as saying.

The tax revenue will be used to subsidise poor households that will be hurt by expected energy price rises as the country liberalises gas and power prices.

Earlier this year Romania approved timetables for the deregulation, after years of delays, as part of a 5 billion euros ($6.2 billion) aid deal from the International Monetary Fund and the European Commission, which requires member states to align prices to EU levels.

But it will also tax energy producers, which are predominantly state-owned and in bad need of investment.

'The cash will come from those companies that would get revenue for which they did not make new investments, no additional efforts and that are simply benefitting from ... deregulation,' Voinea was quoted as saying on Tuesday by state news agency Agerpres.

Romania put off deregulation for years to protect households where the average individual income is less than 350 euros a month.

More than 8 million Romanians and some industrial consumers pay energy prices set by state regulator ANRE and capped below market levels. Voinea estimated roughly 30 percent of households would qualify as vulnerable consumers and receive subsidies.

Capped tariffs have discouraged private investors - who want transparent, market prices - from entering a sector that badly needs their input.

The IMF supported the tax, which would apply until the deregulation is complete. Market liberalisation will happen in stages until 2017 for the electricity sector and 2018 for gas.

'When these gas and power prices will start rising the government is preparing to implement a supplemental lever on the sector and ... form a social safety net,' Romania's IMF mission chief Erik de Vrijer said on Tuesday.($1 = 0.8116 euros)

(Reporting by Luiza Ilie; Editing by Anthony Barker) Keywords: ROMANIA ENERGY/TAX

(luiza.ilie@thomsonreuters.com)(+4021 305 5262)(Reuters Messaging: luiza.ilie.thomsonreuters.com@reuters.net)

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Source: http://www.xe.com/news/2012/08/14/2865133.htm?utm_source=RSS&utm_medium=TL&utm_content=NOGEO&utm_campaign=News_RSS_Art17

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