Romania’s Finance minister wants to abolish the special excise on fuel

Aurel Dragan 19/07/2018 | 13:13

The fuel excise might be removed in the near future, according to the Finance Minister Eugen Teodorovici, present at a press conference, where he declared that he is not a fan of multiple taxes and that ”any normal Romanian should have on his agenda this measure.” The excise in debate is the ”special tax” of 7 eurocents per liter reimposed last year.

The minister showed that he always said that we need to reduce the number of taxes and their quantum.

About the decision of capping fuel prices, just as it is intended for gas, Teodorovici said that the sectors are different and in the gas sector there are ”investments assumed by the two companies that have not been completed, but the gas is more and more expensive.” For the fuel Teodorovici says that it might be a capping if you remove the VAT, but effects would be unpredictable.

The Government will have a metting Thursday, starting at 13.00. The Minister of Finance announced that at the Thursday’s Cabinet meeting Dancilă will be the first reading of the draft decision on setting the maximum selling price of natural gas from domestic production as the maximum selling price of natural gas from domestic production to producers up to on 30 June 2021 to be RON 55 per Mwh. Teodorovici added that the draft would not be adopted at the Executive meeting on Thursday.

The Finance Ministry has announced that it wants to cap the price of gas, having a project to do so. According to the document, in order to eliminate the negative effects on households after the April 1, 2017, liberalization of gas price that set the trend of constant growth. The price is today up by 29.5 percent and in March 2019 is expected to be up by 33.75 percent, an increase that makes the normative act necessary.

The average selling price of natural gas by the domestic producers on the centralized market during April 2017 – August 2018 went from RON 70.93 to RON 77.72 and the average estimated selling price of natural gas to domestic producers on the centralized market on 31 March 2019 will be RON 80.25 per MWh.

Romgaz shares took a 4 percent tumble today on Bucharest Stock Exchange (BVB) due to the news of the government project of capping the gas price. The depreciation took place on a high volume of transactions, of over EUR 2.5 million, meaning that sellers were scared by the government project. If it will become law, analysts expect a further fall for the share price.

On the natural gas market is currently operating one operator of the National Transmission System – Transgaz SA, seven producers (Romgaz, OMV Petrom, Amromco Energy, Raffles Energy, Drill Probe, Stratum Energy and HUNT OIL Company), five external suppliers (Engie Energy Management, Imex Oil, MET International AG, Alpiq Energy SE and Wiee AG Switzerland), two warehouse operators (Romgaz and Depomureş), 36 distributors (the largest being Distrigaz South Network and E.ON Gaz Distributie), 87 active suppliers on the market and three centralized market operators. The gas market has approximately 3.7 million end customers, of which 3.4 million are regulated household customers.

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