Oil companies request gas royalties according to Romanian not Austrian price

Oil companies request authorities to modify laws in the field so that the reference price of gas, according to which royalties are calculated, should take into account transaction prices in the local market, according to a press release of the Oil and Gas Patron Federation (FPPG).

At present, according to an order of the National Agency for Mineral Resources, issued early this year, the reference price of gas is calculated according to the market price on the spot market of the gas exchange in Baumgarten, Austria.

“Considering that, at present, most of the natural gas production in Romania comes from onshore resources, we encourage the application of correct principles of establishing the reference price for natural gas, with the aim of not endangering industry and investment climate,” representatives of gas producers say.

In order to support the Romanian sector of natural gas production, both to ensure the country’s energy security and to protect vulnerable consumers, companies suggest that the reference price should reflect local characteristics of the market and industry (types of contracts concluded, volatility of prices, costs applied by operators and those of regulation services).

At the same time, the reference price should reflect effective prices, in order to avoid overtaxing which could later materialise in higher costs applied to the final consumer.

The reference price should be a predictable, transparent one with undiscriminating character and at the same time it should be the result of dialogue and constructive debate among all parties involved.

The tax on additional incomes obtained as a result of price de- regulation in the natural gas sector, set up in 2013, will be applied to the reference price of gas on the spot market in Austria, not at the effective price with which companies make transactions.

Developed by Codecraftsman