EXCLUSIVE: Romanian Gas Price Increases Dubbed Groundless - Govt Report

The Government's conclusion is shown in the report analyzing the producers and distributors of gas and diesel oil, which was sent to the prime minister for analysis and obtained by MEDIAFAX.

The main companies selling fuel in Romania are OMV Petrom (SNP.RO), Rompetrol, LukOil, MOL and OMV.

Pump prices increased by around 20% in Romania last year.

According to the report, local fuel companies have groundlessly increased pump prices in 2010, even though production and distribution costs remained almost the same (except for the VAT growth from 19% to 24%). In consequence, this situation should generate much higher profits for the companies, and, thus, higher taxes per profit, the document says.

"The data presented by the oil companies show that the tax share in the pump prices' structure dropped from 52.5% at the beginning of 2010 to 49.8% at yearend, so that the pump prices' increase level cannot be justified from the fiscal point of view," the report says.

As regards the international price of crude oil products, the reference quotation in New York was of $80/barrel early 2010, and of around $90/barrel at yearend. "These figures do not justify the increase of around 20% of local pump prices," the Government said in its report.

The Romanian leu traded at 2.9089 units against the US dollar on January 7, 2010 and at 3.235 units on January 13, 2011, resulting thus "an insignificant increase that would not justify the 20% higher pump prices."

The level of excises in the pump prices' structure posted significant variations during 2010 either, the report says.

"The gasoline excise rose by only 3% in 2011 compared with 2010, so that the 20% higher pump prices are groundless even if taking in consideration the leu's exchange rates," the Government says.

The authorities' analysis also shows irregularities in the financial reports of local oil companies, as their 2010 profits do not reflect the evolution of the revenues in ratio to the evolution of their objective expenses.

OMV Petrom, owned by Austrian group OMV, was the only company estimating higher net profit for 2010, respectively 1.709 billion lei (EUR1=RON4.2619), double compared with RON860 million in 2009.

The check-ups were started by the authorities early January, as drivers staged protests across the country over fuel prices.

If you liked this story, please follow MEDIAFAX.RO on FACEBOOK »

The content of mediafax.ro is for your information only. Republishing or using this content is forbidden without express consent of MEDIAFAX. For this consent, please ask for it by mail at vanzari@mediafax.ro.