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March 5, 2021
BUSINESS

New year, new prices – excise duty rise could push fuel prices to RON 6/L

Petrol excise duty went up by EUR 15 per ton and the one for diesel by EUR 11 per ton. Transporters call on Gov’t to act against ‘uncontrolled’ fuel price rises.

Every new year Brings Romania more price hikes, especially for fuel and cigarettes of which excise duty was raised by the emergency ordinance changing the Fiscal Code, following previous price rises operated by oil companies. The unleaded pe­trol excise duty went up from EUR 452/1,000 L to EUR 467/1,000 l on January 1. While the petrol excise duty grew by EUR 15 per ton, the one for diesel went up by EUR 11 per ton, from EUR 347/1,000 L to EUR 358/1,000 L. The excise duty on leaded petrol, alcohol and alcoholic drinks has nor been changed. The higher excise duty will translate into retail fuel prices which will be higher by an average of five centimes compared to 2010. Following these hikes, the price of selected fuel varieties will exceed RON 6/L. Retail petrol price in Romania had grown by 24 per cent in 2010 – one of the steepest rises in the EU according to European Commission data.


UNTRR: PRICE RISE UNJUSTIFIED


The National Union of Road Transporters of Romania (UNTRR) is urging the Government to take a ‘decisive’ stance against the ‘uncontrolled’ fuel price rises, arguing that they already went up by nearly 30 per cent in 2010.


‘UNTR has seen that, in December 2010, fuel prices went up again, that time with no justification. (…) UNTRR hereby expresses its clear opposition to the monopolist price policy practiced by oil companies and demands the Government to adopt a decisive position and stop the phenomenon. (…) Fuel is the biggest cost of road transport operators and the bigger price will lead to a continuous end-price growth’, reads a UNTRR release.


The Road Transporters’ Union says that, after the December 2010 and January 2011, the price of fuel now matches the price in Austria.
‘The excise duty in Romania is 32 per cent smaller and, yet, the end-price is smaller by only 5 per cent. So where does the difference go? With equal filling station prices in Romania and Austria, the Romanian state should withhold the same amount in excise duties and VAT as the Austrian state does. By comparison, next year, the Romanian state is supposed to collect over EUR 500 M more than it has this year. That is the equivalent of 130 km length of new motorway,’ UNTRR says. The officials of Competition Council say that only in 2012 the institution will know if the big players on the oil market have agreed to increase prices for profit or whether it was generated by the development of the crude oil world price, the public television informs.


Protesting the fuel price rise, several motorists in the counties of Iasi, Bucharest, Prahova, Mures and Gorj blocked the activity of several petrol stations at the end of 2010. More exactly, they chose to fill their vehicles with very small quantities of fuel very slowly and then they paid with chance. ‘It is not fair, the price of petrol should be correlated to salaries. Petrol here costs the same as in the UK or other countries where the monthly wage is EUR 1,500 or GBP 1,500,’ said one of the protesters.


European Commission data shows that the price of petrol exclusive of taxes (Euro-super 95) ranges from EUR 643/1,000 L in Denmark to EUR 525/1,000 L in Ireland, with the EU average being EUR 580. The price in Romania is EUR 575, slightly below average, but higher than in Austria, France or the UK. The figures apply to the date of December 20, 2010, so they do not illustrate the price rises operated in the last week of last year. Germany’s price is also bigger than Romania, but the growth there actually happened in the last week. If we take into consideration that last 52 weeks, in 32 petrol was more expensive here than in Germany. Accor­ding to CIA World Factbook data, the 27 EU member states produce a total of roughly 2.4 M barrels per day, Great Britain contributing two thirds of the total production. By comparison, Norway also produces 2.4 M barrels per day. Romania covers 5 per cent of the EU’s oil production, ranked as the fifth biggest producer.


further price rises


In addition to fuel price hikes, motorists will also have to withstand a higher price of third party motor liability insurance which, according to insurers, will grow by an average of 10 per cent. At the same time, under the draft emergency ordinance amending the Fiscal Code, the excise duty calculated for 1,000 cigarettes will be EUR 76.6 this year growing from EUR 74 in 2010, the impact on the unit price being from 50 centimes to RON 1.

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