EU Challenges Romania's Gas Price Cap: Legal Action Looms

The European Commission has issued a stern warning to Romania regarding its gas price cap, threatening potential legal action if the policy is not revised. According to the EU's executive arm, the cap disrupts the free formation of wholesale gas prices, conflicting with the bloc's energy market regulations.

The current legislation requires suppliers in Romania to sell a portion of their production at a predetermined wholesale price, involving compensations since November 2021. The measure is targeted at assisting households, small businesses, and public institutions, yet the European Commission insists it distorts market signals.

Romania's incumbent government, bound by limited powers, must address the issue within two months. Meanwhile, recent political upheavals following the ousting of former Prime Minister Marcel Ciolacu have added layers of complexity. The resolution is imperative as Romania, reliant on domestic producers like OMV Petrom and state-owned Romgaz, navigates a turbulent energy landscape.

(With inputs from agencies.)