Representatives of the two parties that form the ruling coalition in Romania - the Social Democrats (PSD) and Liberals (PNL) - have engaged in mutual accusations and are urging each other to take steps to curb the rise in the price of the fuels.

The Liberal minister of energy Virgil Popescu and the Social Democrat minister of finance Adrian Câciu are targeted by representatives of each other’s party. In the meantime, the head of the Senate, former prime minister Florin Cîțu argues for the free market, but his rhetoric is already not relevant since he lost his position in his party.

The Government’s capacity to implement adequate corrective measures is, however, limited and impaired by the hostility between the two ruling parties. The Social Democrat leader Marcel Ciolacu argued in principle for capping the profit margins [of the oil companies] and urged the [Liberal] minister of energy Virgil Popescu to implement his suggestion by specific procedures “or else, we’ll come up with our own suggestions,” according to Profit.ro. "It is obvious that we must come up with a price cap, within some limits, while all companies must have a profit margin," PSD president Ciolacu said on Monday, June 20.

Another option mentioned by Ciolacu is capping the final price. The solution implied by Ciolacu is feasible but requires close cooperation between the Government and energy market regulator ANRE with the aim of enforcing a cost-plus regime.

The ANRE head, Dumitru Chiriță, was busy these days promoting in Parliament a bill that would double his term in his position (his term will expire this autumn) to 20 years. The agency’s board is formed by politically-appointed members, often with no relevant expertise but rather concerned with securing their positions.

As the Liberal leader, prime minister Nicolae Ciucă is avoiding the economic topics, the spokesman of the party Ionuț Stroe defended minister Popescu and claimed in exchange that the solution should be provided by the [Social Democrat] minister of finance Adrian Câciu. Capping the price would generate costs for the budget, and minister Câciu should explain whether the Government affords it, Ionuț Stroe argued, News.ro reported.

The ministry of finance made clear, in its turn, that lowering the excise duty or cutting the VAT on fuels is not only unsustainable but also against the EU regulations. 

(Photo: Flynt/ Dreamstime)

iulian@romania-insider.com