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June 16, 2021

Boc, Petrom and privatisations

(…) Emil Boc has recently stated that the big fuel price is a consequence of Petrom’s privatisation, an operation which, in His Excellency’s opinion, was
erroneous. More than that, the premier clearly said the Romanian state has no means on its hands to reduce the price of fuel. (…) The decision to privatise Petrom was not a mistake (it is true that the conditions or the price of sale are debatable, but all those aspects pertain to a different story).  And I will explain why the privatisation was a good decision to make: prior to its sale, the state-owned oil company was reporting EUR 246  M worth of losses. Just a year after its privatisation, the same company was  reporting a profit worth some EUR 391 M. (…). The state, too, has had to  gain from the fact that Petrom’s operations had been rendered  cost-effective, thanks to the much bigger amounts the company pumps into  the national budget. (…) Saying that the company sale was a mistake is  therefore an aberration. Equally aberrant is Emil Boc’s assertion that ‘the mistake to privatise Petrom today makes its impossible for us to be able to  intervene on the market to be able to regulate this pricing mechanism’. The  government  can influence fuel prices, but not though interventions in the  economy. It can do that by decreasing taxes. That’s very simple! With his  statements on the matter, Emil Boc has sown his limitations again. (…)

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