Government-generated compensations for the fuel price

The Romanian government seeks to help ailing vehicle owners as fuel prince increases

Leyla Cheamil, 24.06.2022, 13:50

The
price of fuels has constantly increased as of late, in Romania. That sparked discontent among car drivers, who staged protests in petrol stations.
Following a series of talks initiated in the government coalition, Prime
Minister Ciuca on Thursday announced the pump fuel price would be compensated.
Therefore, starting July 1st, for three months, the price per liter of
fuel would be cheaper by 50 bani. The deduction applies for everybody, private
entities or haulers. Also, the deduction will be separately printed on the cash
receipt.

Prime Minister Nicolae Ciuca:

We have identified, jointly with the specialists, a
fixed-sum 50-bani compensation solution, to be implemented straight at the gas
pump. The mechanism by means of which we ensure the stability of the price is
to be implemented for a three-month period. The compensation will be printed
separately on each cash receipt issued by the petrol stations.

The
compensation will be endorsed by the government through an official document
next week. According to Prime Minister Ciuca, the Government will come up with
a mechanism supported by 2 billion lei worth of funding. 1 billion will be
earmarked from the state budget, while the other billion will be provided by
the companies in the oil sector. Prime Minister Ciuca went on to say that, when
the three-month period ends, the opportunity will be examined, to adopt a new
set of measures. The Prime Minister also stated the Government had a useful
instrument at its fingertips, namely the government ordinance issued to stave
off speculative effects. Prime Minister Ciuca was adamant in stating that through
the set of measures a high-level consumer protection would be provided, against
untenable price hikes.

The
other major party in the governing coalition, the Social-Democratic Party, has
nonetheless favored price capping as the best solution. The Social Democrats have
said they complied with the Prime Minister’s decision. However, they said,
should the prices increase again, they would will reiterate, in the governing coalition,
their proposal for a set top-up price level or for the reduction of the trade
markup. The Save Romania Union, in opposition, criticized the Government’s decision.
Instead, the Save Romania Union has pleaded for a consistent VAT drop for fuels,
from 19 to 5%.

In
turn, President Klaus Iohannis stated the reduction of the fuel excise duty could
not be implemented. President Iohannis went on to say direct capping or price
subsidizing were not possible. President Klaus Iohannis also stated Prime Minister
Ciuca assured him the sum required for the 50-bani compensation could be provided
by the state budget. Klaus Iohannis also
said that, ostensibly, the governments had the capacity to reduce the excise
duty, yet that was not feasible, actually, because of the European legislation.
President Iohannis went on to say it was easy to change the excise duty whenever an increase
was implied, but the reduction of the excise duty, that was not possible below
a certain level.

(EN)