The earlier than expected natural gas price hikes operated on the domestic market could improve the figures of Petrom, Romania's biggest company, starting the fourth quarter. Petroleum prices have declined over the past few months, forcing the company to cut petroleum product prices at the pump, and refining margins shrank in the third quarter, according to OMV data.
In late October, the National Natural Gas Regulatory Authority (ANRGN) announced natural gas rates would increase by up to 8.5%, on November 12th, mainly owing to the higher prices for domestic production. Petrom had decided in September, to push up prices for the gas delivered on the domestic market beyond the price set by the regulatory authority in the domain.
Under the circumstances, Distrigaz Nord and Distrigaz Sud did not sign contracts at the price required by Petrom and later asked ANRGN to include these additional costs in the rates charged from end users. Although increased, the price at which Petrom sells gas accounts for around 45% of the price of gas imported from Russia.
Gas price hikes should show in the company's fourth quarter results.
"It's a 20% rate increase, which is fairly important for the company's results. This will be seen in the fourth quarter, though. Gas prices are far from international ones and there might be another hike in January," says Adriana Marin, an analyst with CA IB Securities.
According to ANRGN representatives, Petrom operated prices in September that were 15-20 dollars per thousand cubic metres above the level calculated by the regulatory authority for domestic production, of around 115 dollars per one thousand cubic metres.
Annual sales of 5 billion cubic metres and an increase of the delivery price of 15 dollars per one thousand cubic metres would annually add 75 million dollars (60 million euros) to the company's revenues.
Petrom reported net income worth 403 million euros for the first six months, 2.3 times higher than the figure reached in the same period of last year.
In the first half, Petrom extracted 3 billion cubic metres of gas, being one of the top domestic gas producers beside Romgaz, which boasts annual production of 6.3 billion cubic metres.
Petrom sold around 2.5 billion cubic metres on the domestic market in the first half of this year, while around 500 million cubic metres were delivered to Arpechim refinery.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
