The text of the Emergency Ordinance on the 50 bani reduction in the price of fuels has been drafted and as a result of this decrease, Romania will have the lowest price in Europe, after Hungary, the Minister of Energy, Virgil Popescu said on Tuesday, while attending an event in Vadu, Constanţa County, on the occasion of starting the exploitation of natural gas in the Midia project, operated by the company Black Sea Oil & Gas.
The Energy minister underlined that 25 bani from this reduction will be supported from the state budget and 25 bani by the operator and expressed his conviction that they will apply the Ordinance.
“All ministries worked together, the text of the Emergency Ordinance was drafted. It is about that 50 bani per liter (…). Following this decrease, practically, Romania will have a price, if I’m not mistaken, for diesel, of 1.7 euros and a little and for gasoline, 1.61 and a little. It will be practically, after Hungary, which already has a capped price, I think the lowest price in Europe. (…) 25 bani out of this 50 bani will be supported from the state budget, through the Ministry of Finance, and 25 banie will be supported as a deductible expense by the operators. And I am convinced that you should not ask me, I am convinced that the big operators, the big owners of distribution station networks, who are also producers, also have distribution station networks, will apply this ordinance”, said Virgil Popescu.
The minister explained that the 25 bani, being a commercial reduction, are deductible, as provided by the Fiscal Code, “so they have an additional fiscal advantage in addition to recovering the 25 bani from the state budget”.
Romanian PM Nicolae Ciuca announced last week that the price of fuel at the pump will be offset by 50 bani. “In order for Romanian citizens and companies to pay less for fuel, we identified together with the specialists a fixed compensation solution of 50 money that is applied directly to the pump,” Ciuca said on Thursday. The mechanism will be applied for a period of three months.
UDMR chairman Kelemen Hunor, told Digi24 on Tuesday, that several options for reducing fuel prices were discussed in the governing coalition, but that in the end it was decided to compensate with 50 bani. He believes that the “vast majority of traders” will apply this compensation, given that there have been discussions with representatives of the major companies OMV and Rompetrol.
Kelemen Hunor, who is also deputy prime minister explained that the impact of a cap on petrol and diesel prices by law would be “brutal” for the market and, given that the state no longer owns a majority in any of the oil companies, it can no longer control the price, as did the Hungarian government.
According to him, the budget effort will be around RON 800-900 M up to 1 billion lei for three months.
UDMR lders said that the “old mistakes” of the Romanian state “have a long shadow, which comes until 2022”.
“Everyone says how the Hungarians did it, how others did it. We did a lot of stupid things many years ago and we have to say that. The Romanian state no longer controls almost anything of what the oil industry means. The refineries are not state-owned. In Hungary, the MOL owns about 80, 80 and a few percent of everything that means the oil industry and the state is the majority shareholder in the MOL. And they reduced the profit margin. From there they managed to cap for a while, I don’t know how long. We do not have this possibility, unfortunately. It is now proven that old mistakes have a long shadow, which comes until 2022. That’s when I came up with the idea that you have to go private. You didn’t give much to the private sector, because how much OMV is private is another discussion. The Romanian state has lost all control over this sector and more. In the energy area, this period proves that it is good to have control levers, beyond the regulatory authority, which has some possibilities, but quite limited. At the moment, we cannot go for the profit margin, because we do not own the majority in these companies”, said Kelemen.
Assurance on the gas next winter
Romania is in advanced negotiations to import gas from Azerbaijan, Egypt and the United Arab Emirates and there is no risk that in winter we will run out of gas or rationalize the population’s consumption, said on Tuesday, Ion Sterian, General Manager of Transgaz, attending the same event in Vadu.
“From the Ana and Doina oil fields, 3 million cubic meters of gas per day enter the national system, an amount that was forecasted several years ago. The gases are of very good quality, with a methane content of over 90%. they will help reduce dependence on imported gases,” Sterian stated.
He added that the project is proceeding according to plan. “Everything is functional, because if it wasn’t functional, we wouldn’t be here today.”