The level of taxation applied to energy and fuels reduces the competitiveness of Romanian industry and generates additional pressures on the prices of consumer goods, claims the president of the Smart Energy Association (AEI), Dumitru Chisăliță, in an analysis on the impact of energy costs on the economy.
“Europe is not poor in people, technology or capital. However, it is increasingly poor in cheap energy. And this is not a geological fatality, but the result of political decisions. By massively taxing fuel, electricity and gas, Romania, like many EU countries, has chosen to transform its own energy infrastructure into a budgetary and ideological cash cow. The result is an economy that is breathing increasingly hard. While the United States, the Middle East and much of Asia supply industries with cheap and stable energy, Europe has put itself at a structural disadvantage. Excise duties, VAT and “decarbonisation” schemes push the price of energy to levels that make industrial production uncompetitive. A steel or fertiliser factory cannot be “green” if it no longer exists. When energy becomes more expensive than labor, production goes away,” claims Dumitru Chisăliță, quoted by Agerpres.
According to him, energy represents between 20% and 50% of the costs of some basic industries, and high taxation is reflected in both investments and final prices.
“When we tax it aggressively, we are not “correcting the market,” but rather driving away capital. Europe has already started to see the effects: massive relocations to the US, where gas is several times cheaper, industrial investments blocked, supply chains moved. But the cost is not just industrial. Taxes on diesel and gasoline are found in every loaf of bread, every apartment built, every product transported. It is a regressive tax: it hits harder on those who do physical work, who commute, who heat modest homes. Under the pretext of the “green transition”, Europe has created a form of energy austerity that impoverishes the population and thins the middle class”, the quoted source states.
The AEI president claims that Romania lives with the illusion that it taxes drivers, but in reality it taxes bread.
“The excise tax on diesel is the least understood and most destructive tax in the European economy. Because it does not hit a final product, but the very movement of goods. And in a modern economy, everything moves: wheat, milk, packaging, workers, parts, finished products. Every kilometer traveled by a truck carries with it a hidden tax that infiltrates every price on the shelf”, explained Chisăliță.
On the other hand, he claims that diesel does not fuel trucks, but inflation.
“In Romania, as in most countries in the European Union, diesel taxes are 4-6 times higher than in the United States. This is not a marginal difference. It is a change in the economic regime. A truck that travels 1,000 km in Europe pays the state approximately 200 euros in fuel taxes alone. The same truck in America pays less than 40 euros. The difference does not disappear. It is transferred directly into the price of every carton of milk, every loaf of bread and screw. Why does food become expensive even when there is no wheat. Let me follow the bread. Wheat is transported to the mill. Flour goes to the factory. Bread goes to the warehouse. From there to the supermarket. Each stage means a truck. Each truck means diesel. Each liter of diesel means excise duty. This is a form of structural inflation: it does not come from greed, it does not come from a lack of supply, but from a tax system that artificially increases the price of every movement,” the specialist added.
According to him, inflation in Romania is not monetary, but logistical, given that transport is taxed as a luxury.
“In a modern economy, productivity comes from: specialization, large markets, rapid movement of goods. Romania does exactly the opposite: penalizes distance and energy. Penalizes distribution. Penalizes production far from large cities. The result is inflation that cannot be “cured” through interest rates, because it is not a demand problem, but one of structural costs. The problem is not concern for the environment. The problem is that Romania, like most EU countries, has chosen the worst method by increasing the price of fuels and basic energy through taxes and duties without using these funds to invest massively in cheap and clean production. It transformed the kilowatt and the liter of fuel into fiscal instruments, not strategic goods,” the AEI president noted.
He argues that no great economic power in history was built on expensive energy.
“From the Industrial Revolution to the post-war American boom, prosperity went hand in hand with abundant and accessible energy. Romania, like many European countries, is now doing the opposite experiment, to remain rich by penalizing energy consumption. It is a contradiction that cannot last. If this trajectory continues, Romania will not relaunch any economy, regardless of the recovery plans made. It will slowly slide into a prolonged stagnation with less industry, more imports, more social tensions, less global relevance. Not a spectacular collapse, but a continuous erosion,” Chisăliță noted.