The Government's intention to raise fuel prices was met with a wave of criticism from the Opposition, the National Bank governor and road carriers
Although they were called in for a special session, the Romanian Deputies and Senators were in no rush to attend the meeting in which they should have discussed the emergency ordinances passed last week by the Government headed by the Social Democrat Mihai Tudose. The bills for which the special session was originally convened concern, among other things, the adjustment of pension benefits to the inflation rate, a cap of nearly 1,900 euros per month on child rearing indemnity, a 10% increase in police worker salaries and a 15% rise in the salaries of civilian personnel in the Defence Ministry.
On the other hand, the Government is considering changes in the Fiscal Code. One such planned change is an increase in fuel excises, which would push prices up to the level reported in late 2016. Under a draft ordinance, excise duties on diesel fuels will be raised by 24.9%, and excises on lead-free petrol by 22.8%, as of September 1st. Authorities say that budget revenues in this category have dropped, and fuel prices in Romania are among the lowest in the European Union. The Senate Speaker Calin Popescu Tariceanu, whose party, the Alliance of Liberals and Democrats in Romania, is a member of the ruling coalition, says the excise increase would influence end-prices to a very small extent.
Calin Popescu Tariceanu: "At present, fuel charges are not actually paid by companies. Companies only bill the amounts further to end-users and transfer the respective money into the state budget. This is how things work everywhere, in Romania as well as abroad. So this increase in fuel excises will only have a slight, virtually insignificant impact on the end-price of fuels."
However, the Opposition does not see the move with friendly eyes. The Liberals warn that prices and tariffs for all goods and services are bound to go up. The president of the Liberal Party, Ludovic Orban:
"In order to be able to cover the salary and pension increases which are not based on actual economic growth, the Tudose Cabinet only takes measures that will lead to the collapse of the Romanian economy. The Government's plan to raise fuel excises will lead to increases in the prices of all goods and services, as a result of fuel price rises."
In turn, the governor of the National Bank, Mugur Isarescu, warns that an increase in excise duties will push the inflation rate up. The National Union of Road Carriers has also criticised the Government's intention. The organisation warns that around 70% of the current fuel purchases by international carriers in Romania might get shifted to other countries, which would have a disastrous impact on the state budget. Carriers also suggest that the state should refund the VAT in an easy and predictable manner, to both Romanian and foreign taxpayers, so as to attract fuel consumption and collect higher excises.
Useful Links
Copyright © . All rights reserved