Radio România Internațional

Tag: spike

  • Measures to subsidize fuel prices

    Measures to subsidize fuel prices

    The government
    in Bucharest on Thursday passed a bill for 0.5 RON subsidies
    from the budget and fuel suppliers per liter of fuel. The decision was made for
    citizens and companies to pay less on fuel, given the latest price spikes in
    this commodity. The measure is valid
    for the next three months and at the end of this period, the government is
    expected to analyze a new set of measures if need be.




    The government admits however that the
    concrete implementation of the bill might be delayed for a while until suppliers
    have updated their fiscal procedures. Moreover, the measure isn’t compulsory,
    as fuel suppliers can choose whether to cut prices by 0.25% or not. However,
    the Romanian Minister of the Economy, Virgil Popescu has given assurances that
    the big chains of suppliers will apply the measure.




    At the same time, authorities have pledged to monitor
    fuel price evolution in the months of July, August and September and to sanction
    any new hike under the ordinance of combating speculation. On the other hand, according
    to state secretary with the Finance Ministry, Mihai Diaconu, the measure to
    subsidize fuel will not increase the budget deficit.




    According
    to our estimates, the calculated impact of the 0.25% subsidy will be offset by
    the fact that swollen prices would have dampened consumption. Lower consumption
    would mean lower excise returns, and in principle we believe these could be
    offset. The measure will boost the economy Diaconu went on to say.




    He added that according to the Finance Ministry estimates,
    state expenses will stay around 800 million lei, which will be added to the
    other 800 million lei the suppliers aren’t going to pay as they will be offset
    by their taxes and duties. The impact would have been bigger had the prices
    gone higher, says Diaconu explaining the Ministry sought to find a simplified
    mechanism to offset these subsidies granted to enterprises.




    Within 15 days since the endorsement of the ordinance, through
    an order by the ANAF president, fuel suppliers will be made available a model
    of application. Then the subsidy will be applied according to their fiscal
    duties, the VAT, corporate tax, etc.
    We estimate that the offset will be done on the VAT side, Diaconu added.


    (bill)

  • Government-generated compensations for the fuel price

    Government-generated compensations for the fuel price




    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)