The capping and compensation scheme for gas and electricity continues for another year, and from April 2025 it will gradually return to the free market for one year, according to an Emergency Ordinance recently adopted by the Ciolacu Government. The normative act also provides for new, lower ceilings for household consumers and for companies. And RCA policy prices remain capped for another three months.
“We promised the Romanians that we would maintain the ceiling on energy and gas prices until the spring of 2025. Today, we are taking an extra step and modifying the ceilings in favor of consumers! It is normal to take into account the trend of reducing energy and gas prices at the European level. The population and the economy are still protected! And we also ensure that the return to the free market is done in stages, until 2026, with fair prices for Romanians”, said Marcel Ciolacu, at the beginning of the Government meeting.
At the European and national level, there is a tendency for electricity and natural gas prices to fall, and even, in some cases, prices have fallen below the ceiling thresholds. As a result, the Ciolacu Government also updated the ceilings, so that these decreases are also reflected in the invoices of the final customers. The changes will take effect from April 1.
The capping scheme proposed by the PSD ranks Romania in 4th place for the most affordable gas and the fifth country with the most affordable electricity in the European Union, according to data published by the European Commission for the 3rd quarter of 2023.
RCA capped, three more months
The government led by the president of the PSD, Marcel Ciolacu, decided to extend the capping of RCA tariffs until June 30, as the insurance market has not been able to stabilize even after a year after the entry into force of this measure. In the first 3 months of the current year, more than 21,000 requests for allocation of high-risk policyholders were registered, which represents approximately 2,600 such policyholders per RCA insurer.
“We are extending the capping of RCA tariffs for another three months, until June 30. We want to combat any risk of excessive price increases due to previous imbalances in this market. And let’s give a helping hand to the Romanians, as ASF did recently and seriously reduced RCA insurance in the case of transporters”, said Prime Minister Marcel Ciolacu.
The executive adopted the decision to cap RCA prices a year ago, setting premium rates for RCA insurance at the level practiced on February 28, 2023. Initially, prices were capped for a period of 6 months, later extended until March 31, 2024 , being adjusted by a maximum percentage of 6.8% to take inflation into account.
These measures are intended to ensure the stability and accessibility of car insurance for all drivers in Romania until there is a change in the legislation in force.
At the same time, Parliament is working on a new RCA law proposed by ASF and supported by PSD MPs, which could introduce the concept of “RCA per driver”. This project, which has generated a lot of debate, could bring significant changes for drivers and also aims to regulate the insurance market.
The exorbitant interest rates, capped at the PSD proposal
Romanians get essential financial protection against exorbitant interest rates on loans granted by Non-Banking Financial Institutions (NBFIs). The law proposed by the PSD senator, Daniel Zamfir, imposes a cap on interest rates, while limiting the aggressive actions of recovery agents.
“Parliament voted to cap those unreasonable interest rates on loans, like 20,000 percent, practiced for so long by non-banking financial institutions. In fact, wherever we see speculation and excesses that affect the standard of living of Romanians, we intervene and regulate the situation!” said Prime Minister Marcel Ciolacu.
The move came after the ANPC found that there are NFIs that charge interest rates of up to 60,000%, with an average interest rate of around 7-800%. With the adoption of this bill, such interests become illegal, including for ongoing contracts.
According to the project voted by the PSD, the new regulations will affect: mortgage loans, where the effective annual interest rate (APR) cannot exceed the reference interest rate of the National Bank of Romania (BNR) plus 2%, for consumer loans. The APR will not be higher than the reference interest rate of the National Bank of Romania plus 15%, as well as for consumer loans of less than 15,000 lei, and the total amount to be repaid cannot exceed double the amount borrowed. Consequently, according to the same project, customers will not pay more than double the amount borrowed, since recovery agencies cannot ask for more than the value of the debt.
