Transportation tariff for domestic oil increased by 1.4 pc. ROPEPCA: ‘Romanian petroleum industry to be severely affected’

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The National Agency for Mineral Resources (ANRM) increased by 1.4 percent the transportation tariff charged by Conpet Ploiesti for domestic crude oil, through the national pipeline, a decision contested by the Romanian Petroleum Exploration and Production Companies Association (ROPEPCA).

“I learned from the media that it was published in the Official Gazette the new order on the transportation tariff for domestic oil. We are surprised that the debate and the public consultation, as it was initiated in January 2016, was not completed according to the proposed agenda and as it was agreed by all parties engaged in the dialogue. Clearly, the NAMR decision contradicts one of the first priorities stated by the Ministry of Energy, that of supporting domestic production,” Artur Stratan, President of the ROPEPCA stated.

In ROPEPCA’s view, the Romanian petroleum industry will be severely affected by the increase of transportation tariff given the unfavorable environment for the oil price and the over taxation of the petroleum operations.

“The additional burden brought by the Conpet tariff increase to nearly RON 80/ton of oil transported by pipelines can threaten the survival of an entire economic sector and shall create a dangerous precedent for future similar actions,” the association in the field warns.

The increase of transportation tariff for oil and associated products with more than 1.4 percent and the increase of the transportation tariff of imported oil will lead to an increase of more than EUR 1 million, compared to last year, of the amounts paid by hydrocarbons’ producers for this service, although production is declining, the trading price remains at unsustainable levels and taxation is still maintained at higher rates than the European average.

The increase is likely to additionally affect the competitiveness of domestic oil, under the circumstances that the drop in oil prices alone, caused the raise of transportation tariff share in oil price from 3 percent of the value of a barrel in 2014 to over 7.5 percent at current prices, ROPEPCA explained. Moreover, such a measure could stimulate oil imports, given that the trade deficit raised by 30% in 2015 compared to 2014.

“Yearly, the amount of domestic oil transported by Conpet declines, a trend accentuated by the general global environment of the petroleum sector, which also affects Romania,” the release also reads.

According to ROPEPCA’s member companies, the transportation system of oil and associated products by Conpet pipelines can provide a commercially viable and effective alternative to transportation by road or rail, as long as the tariff level, territorial expansion of pipelines and the quality of provided services take into account the general economic climate and the specific conditions of the market.

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