Bagratian, Hrant, and Emine Gurgen, 1997, “Payments Arrears in the Gas and Electric Power Sectors of the Russian Federation and Ukraine,” IMF Working Paper 97/162 (Washington: International Monetary Fund).
Cornillie, Jan, and Samuel Fankhauser, 2002, “The Energy Intensity of Transition Countries,” Working Paper 72 (London: European Bank for Reconstruction and Development).
Daianu, Daniel, 1994, “Inter-Enterprise Arrears in a Post-Command Economy: Thoughts from a Romanian Perspective,” IMF Working Paper 94/54 (Washington: International Monetary Fund).
European Bank for Reconstruction and Development, 2001, Transition Report 2001 (London: European Bank for Reconstruction and Development).
National Regulatory Authority in the Fields of Energy and Electricity, 2002, Annual Report 2001 (Bucharest: National Regulatory Authority in the Field of Energy). Available via the Internet: http://www.anre.ro.
National Regulatory Authority in Natural Gas Sector, 2002, Activity Report for the Year 2001 (Bucharest: National Regulatory Authority in Natural Gas Sector). Available via the Internet: http://www.anrgn.ro/report.htm.
Organization for Economic Cooperation and Development, 2002, Romania: Country Economic Assessment (Paris: Organization for Economic Cooperation and Development).
Organization for Economic Cooperation and Development, 2000, Labor Market and Social Policies in Romania (Paris: Organization for Economic Cooperation and Development).
Petri, Martin, Gunther Taube, and Aleh Tsyvinski, 2002, “Energy Sector Quasi-Fiscal Activities in the Countries of the Former Soviet Union,” IMF Working Paper 02/60 (Washington: International Monetary Fund).
Energy intensity in industry rose by 19 percent during the period 1992–98, owing mostly to the slow pace in the restructuring of the state-owned enterprises. See Cornillie and Fankhauser (2002).
Furthermore, due to the low gas tariff policy, district heating has been more expensive for households than natural gas for heating purpose. End-users have been switching individually to gas heating that is probably costlier for the community.
Bagratian and Gurgen (1997) analyze for instance similar payment arrears in the gas and electric power sectors of the Russian Federation and Ukraine.
For instance EU Directive 93/76 regarding limitation of polluting emissions by increasing energy efficiency (Directive SAVE), EU Directive 96/92 on the opening of the energy market and introduction of competition, EU Directive 98/30 regarding the rules of the single natural gas market.
The level of quasi-fiscal subsidies is calculated through the “End-Product Approach”, based on the quantity of energy sold, the end-user prices and the collection rates compared to import or export prices (see Petri and others (2002)).
The total amount is close to that of recent estimates by the OECD in their Country Assessment. The OECD estimated roughly that total direct and indirect subsidies were equivalent to 8 percent of GDP, with 6 percent accounted for by the energy sector, including coal. The amount of subsidies to the coal sector is estimated at 0.5 percent of GDP.
Inter-Enterprise Arrears in Post-Command Economy: Thoughts from a Romanian Perspective, Daianu, 1994.
In addition to these increases, tariffs for natural gas and electricity have continued to be adjusted for the variation in the U.S. dollar exchange rate every quarter.
In the power sector, several measures in the tariff structure have already been implemented to limit tariff distortions. In particular, time-of-day pricing has been introduced that more closely reflects marginal costs, as well as capacity charges.
EBRD (2001) suggests to use the long-run marginal cost in the United States, an energy-intensive country, as an initial yardstick for the transition countries.
Termoelectrica’s access to the liberalized market has been limited to 10 percent. But even this is purchased by the distributor Electrica, in the absence of interested eligible consumers.
While energy demand from households has remained flat, the total volume of district heat supplied to households has fallen by 30 percent in recent years.
Without budgetary support, it remains to be seen whether the newly transferred plants will be able to avoid losses.
Experience in eastern European countries suggest that in cases where the private sector has entered power distribution, payment collections have improved. See EBRD Annual Transition Report, 2001.
The IMF’s Report on Observance of Standard and Codes (2002) provides further detailed recommendations on measures to strengthen budgetary transparency in Romania.