Prime Minister Victor Ponta recently said the government has no tools to lower fuel prices on a free market, but it can make fiscal policies to support this decrease.

The tax-free gas price in mid-December was RON 2.23 (EUR 0.49) per litre, while the price including tax reached RON 5.298 (EUR 1.17) perlitre, which means that more than half of the gasoline and diesel prices actually fuel the state’s budget.

Fuel prices have declined by about 15% in Romania, since early October, but this only partially reflected the steep drop in international oil prices, which was more than 50% in the last six months.

Prime Minister Victor Ponta last week asked the Ministers of Transport and Finance to discuss with company representatives about fuel prices, hoping they will be able to reach a fair and reasonable price.

However, the Government last year made two decisions which increased taxes on fuels sold in Romania. First, the Government introduced an extra excise of 7 cents per litre of gasoline, aiming to raise money for new highways, and then kept a fixed exchange rate of RON 4.7380/EUR to calculate the excise duties for 2015, which is almost 6% higher than the official exchange rate.

editor@romania-insider.com