Moldova Proposes Restructuring Gas Industry Amid Rate Hike Concerns

The Ministry of Energy in Moldova has proposed restructuring the country's gas industry to lower tariffs for consumers. The current rate hike, set to occur due to rising international gas prices, has sparked debate and concern.

According to Energy Minister Dorin Junghiu, the price of natural gas on European markets has reached 64 euros per MWh, making it difficult for Moldova to isolate itself from these developments. He notes that after the cost of purchased gas, distribution services are the largest component of the final tariff, costing consumers nearly 4 lei per cubic meter or about 30% of the final price.

The ministry proposes merging the 12 gas distribution companies part of the 'Moldovagaz' group into a single company to reduce administrative costs and improve efficiency. However, Chairman of the Board of JSC 'Moldovagaz', Vadim Cheban, emphasized that the reorganization will not have an immediate or significant impact on natural gas tariffs.

A simple calculation shows that while distribution accounts for 30% of the final tariff, it is only slightly higher than transportation services. However, the high cost of distribution is due to the significantly greater length of the network and operational expenses.