Moldovan PM sacks energy minister, declares state of emergency in energy sector

Moldova’s Prime Minister Dorin Recean has sacked minister of energy Victor Parlicov, head of state owned energy trader Energocom, Victor Binzan, and the state’s representative on the supervisory board of Moldovagaz, Sergiu Tofilat, accusing them of failing to secure the necessary natural gas deposits ahead of the winter.

Recean sent to lawmakers a request to introduce a state of emergency from December 16 until the “situation regarding the natural gas supply, including that of the Moldovans in Transnistria is settled”. 

The move was broadly seen as a way to address public discontent about the recent 27.5% natural gas price increase and other problems in the energy system that are likely to follow if Gazprom fails to reroute its deliveries to Moldova, so far sent through Ukraine, through Turkey. The current gas transit agreement between Gazprom and Ukraine is due to end on December 31. 

Moldova has diversified away from Russian gas. However, the separatist Transnistria region still receives gas from Gazprom, which it uses to produce electricity supplied to the rest of Moldova.

The price hike asked for by natural gas supply company Moldovagaz was necessary because of the higher prices paid for gas purchased in October and November, after the company had insufficient funds to accumulate gas reserves in advance during the summer period, head of the company Vasile Ceban explained. He kept his seat, as Moldovagaz is controlled by Gazprom and is not under the direct control of the government.

Supplying the separatist Transnistria region with natural gas, and thus the entire country with electricity, is another hot potato in the hands of the government in Chisinau. 

No procurement of natural gas in advance would have fully addressed the risk of further energy prices hikes and possible energy scarcity. At most, such massive stocks would have allowed the central authorities to deliver free gas to Transnistria, instead of Gazprom, at a cost estimated at $400mn – a tough political decision that Recean never addressed. 

Minister for Reintegration Oleg Serebrian, responsible for relations with Transnistria, said that the central authorities are ready to supply the residents of Transnistria with gas – but at the same prices paid by all the other residents in the country. So far, the residents of the separatist, pro-Russian region have been paying preferential prices since Transnistria does not pay its gas bill to Gazprom.

According to representatives of Moldovagaz there are gas amounts contracted to cover 80% of this winter’s needs – meaning for the months of December and January – and the company is organising auctions to buy the rest. However, higher gas prices at present will push up the cost.