The government committed to the IMF to cut heat subsidies in the upcoming period which will increase the costs incurred by the population for heat and hot water by up to 60% by the end of the year depending on the capacity of mayors to cover the difference from their own sources, Romanian news agency Mediafax reports.

The subisdies for themal energy is offered from the state’s budget and from local budgets. IMF chief of mission in Romania, Jeffrey Franks declared for Mediafax that the government will cut the subsidy by the end of the year but will maintain the same level or even increase subsidies for heat for underprivilidged people.

According to IMF representatives, the elimination of subsidies this year will also have an effect on inflation that would increase up to 6%, according to the lattest central bank estimate.