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Carolin Busch, Dr. Ricardo Giucci

Gas crisis in Moldova: the times of cheap gas are over

The gas contract between Gazprom and Moldovagaz came to an end in Sep-21. Negotiations on a new contract were tough, also due to very high international gas prices, but finally an agreement was struck. The new price, which is linked to international oil and gas prices, is likely to be much higher than in the past.

  • Moldova
NL 68 | November-December 2021
Energy and Climate

While Moldova paid 149 USD/tcm on average in 2020, the import price will amount to around 565 USD/tcm in the period until Sep-22.

Thus, the country faces a severe gas price shock, which calls for government action. In our view, government should focus on households, not on business: energy intensity of industry is rather limited, given the lack of heavy industry. Furthermore, government should focus on vulnerable households. For this heating season, government was not able to introduce a targeted system of subsidies. However, work to establish a targeted system for the next heating period should start immediately.

Beyond the issue of subsides, the gas price shock calls for deep structural reforms in the energy sector. Moldova needs to diversify the supply of gas and electricity, introduce measures to increase energy efficiency, and attract investment into renewable energies. The times of cheap gas are over, and the country needs to adapt to the new reality.

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