Expensive in the chain. The price of gas on the European stock market increased by another 25% / Where will the Romanians feel the effects

The gas market is badly shaken by the halt in supplies from Qatar, the world's largest producer of liquefied gas, due to the war in the Middle East. After a 50% increase on Monday, gas continues to rise in price on the European market by another 20% on Tuesday. In Romania, the price of gas for the population is capped, but the price of electricity depends directly on that of gas, and we can expect price increases in the chain in the economy, including food products, in the coming period.

Gas quotations on the TTF Amsterdam gas exchange, a reference for the European market, increased by 48% on Monday, up to 47.32 euros/MWh. On Tuesday, the quotation exceeded 58 euros per MWh.

For domestic consumers in Romania, the price paid in invoices is currently capped from 2021 until March 31, 2026. The government plans to postpone the liberalization by one year, until April 1, 2027, but has not yet approved any normative act in this regard.

For non-household consumers, i.e. businesses and industrial consumers, the price cap will be removed on March 31, 2026, with these users paying the market price.

Why does electricity become more expensive when gas prices rise?

In Romania, on the electricity market, even if there are several producers, each with their own costs, the final price is determined by the producers with the highest costs.

Since in Romania the gas plants have the highest costs, then they determine the price of the entire market, regardless of their share in the national consumption.

The electricity market in Romania is completely liberalized, and prices on the wholesale market in South-Eastern Europe are anyway higher than in the rest of Europe.

We can therefore expect increases in current bills, if the tense situation continues.

Food prices and pressure on inflation

Romania is the largest gas producer in the EU, but the market price is the same as in Europe.

If the price of gas for the population is capped, the industry (fertilizer, chemical, metallurgy, energy producers) buys the gas at the market price.

Given that the selling price of natural gas to industrial consumers is often contractually linked to the FTT price, its increase also leads to an increase in the price to industrial consumers.

“A price of 40 euros/MWh per FTT can lead to a price increase for non-domestic consumers by about 20% compared to 2025, and a price of 60 €/MWh per FTT can lead to a price increase for non-domestic consumers by about 40% compared to 2025”, according to an analysis by the Intelligent Energy Association (AEI).

When gas and electricity bills go up, factories either cut back or, in turn, raise the prices of their products, and so there can be a chain price rise in food and other products and services.

Romania produces approximately 90% of its own gas consumption, and the rest comes from imports.

“For Romania, the impact is temporarily cushioned by caps and domestic production, but if tensions persist, the pressure on industry, inflation and the economy will become inevitable. Energy is no longer just a commodity. It is an indicator of global geopolitical stability, and the TTF is the thermometer of these fragilities”, state the specialists from AEI.