The measure to reduce excise tax on diesel should be adopted this week, to take effect starting next week, Energy Minister Bogdan Ivan said on Tuesday.
“It is a project that the Ministry of Finance must do, since it is about taxation. It is now calculating how it will be applied. From my point of view, this decision must be made this week to take effect starting next week, because it takes until you take a certain amount of fuel out of the warehouse. At the moment, the Romanian state, through the Ministry of Finance, has some additional revenues from VAT due to the increase in prices at the pump. These additional earnings are being calculated very clearly, other alternative sources are also being calculated by the Ministry of Finance in order to be able to support this decrease in excise duty, in a way that people end up having a lower cost at the final price. The way in which this is done is currently being worked out by the Ministry of Finance, because it is a taxation measure and I believe that this extremely important measure must be adopted this week”, explained Ivan, quoted by Agerpres.
According to the cited source, the measure to reduce excise duty on diesel should be added to other measures adopted so far, such as limiting exports, reducing the bioethanol component in gasoline and reopening the Petrotel refinery.
“From my point of view, we have a European and national practice, which we proposed four weeks ago and adopted last week, namely: to limit exports, to create alternative fuel and oil supply routes, to increase refining capacity, to reduce the quantities of biofuel in the final products. What the European Union recommended to us, we have already done. Also, the European Union tells us that the only option through which we can lower the final price is to reach the excise duty reduction zone. Something that I proposed four weeks ago together with my colleague, the president of the PSD, Sorin Grindeanu, and which is to be adopted this week in a decision of the Romanian Government through a draft normative act prepared by the Ministry of Finance, which is directly responsible”, stated Bogdan Ivan.
Asked by journalists how much the price of a liter of diesel would drop at the pump following the excise tax reduction, the Minister of Energy claimed that the figures could be provided by the Ministry of Finance after calculating the affordability of the budget.
Regarding fuel rationing, Ivan said that “this scenario is not being considered”, emphasizing that Romania has sufficient reserves and alternative routes for supplying crude oil and diesel.
On the other hand, the Minister explained the reasons why the excise tax reduction would only target diesel.
“The biggest impact on the Romanian market is on diesel, because here there were also the biggest increases and the highest prices, because Romania imports diesel directly and because in the case of gasoline we see that we have lower prices, because we produce gasoline and export about half of what we produce. That is, we ensure our domestic needs. The total impact on the economy is in diesel, and on agriculture, and on transport, and on the food industry. So we prefer that the gain we make from not reducing the excise duty on gasoline to be transferred to diesel in order to have a greater impact”, said Bogdan Ivan.
The Minister of Energy also specified that Romania could only resort to state reserves when it is found that there are supply problems.