Gas price hike - Foodstuff prices to go up 20% in March

Foodstuff prices will increase by 20 percent due to the hike in the price of natural gas, the fall of the leu and the costs with the raw materials in the food industry, the head of the Food Industry National Unions (FSIA), Dragos Frumosu.

The 8.5 percent increase in the price of gas results in a 7 percent increase in the price of foodstuff, the official explained. The increase in foodstuff prices will take place following different stages, starting February 1.

The largest increase, of up to 20 percent, will take place in March. Viorel Marin, the head of the employers in the bakery industry, said not all bread producers will increase prices as they face the risk of low sales. The official explained prices could lower if the government will reduce the VAT.

Domestic consumers will pay 8.5 percent more for natural gas starting February 1, due to higher imported gas prices and distribution tariffs, Romania's gas market regulator (ANRE) today announced.

Gas supplier Distrigaz Sud will charge 989.55 lei per thousand cubic meters for domestic consumers with an annual consumption below 2,400 cubic meters. E.ON Gaz Romania, another provider, will charge 983.10 lei per thousand cubic meters, for same category of consumers.

ANRE recommended a price of 495 lei per thousand cubic meters for the natural gas produced in the country, versus the 470 lei paid in the last quarter of 2007.

People with ANRE said the increase is meant to protect consumers in the light of further increases that may take place this year.

The European Commission previously asked Romania to align the price of natural gas from domestic production to the price existing in the European Union, as it had promised to within the EU accession negotiations.

Romania, which joined the bloc on January 1 last year, now imports 38.31 percent of the entire quantity of gas it needs. The rest comes from the domestic production.

The price of the gas produced in Romania stands at 180 U.S. dollars per thousand cubic meters. Imported gas has a price of 370 U.S. dollars per thousand cubic meters.

Natural gas operator Distrigaz Sud said  last week an increase of maximum 10 percent is likely to take place within the first quarter of the year.

NewsIn