Romania follows Hungary’s lead on fuel price cap after prices more than double

Petrom station on Bucharest, Romania.
By Dénes Albert
3 Min Read

Romania will compensate consumers for the increase in fuel prices for at least three months starting in July, two party members of the governing coalition, Liberal Prime Minister Nicolae Ciucă and Social Democrat Marcel Ciolacu, announced on Wednesday. The measures will be detailed after the government’s meeting on Thursday.

According to the leaders of Romania’s governing parties, the law on the compensation mechanism will be adopted at the next government meeting. The compensation will be financed from the state budget, but the government is also considering the possibility of charging part of the compensation to companies operating in the sector.

The grand coalition in Bucharest, of which the Democratic Alliance of Hungarians in Romania (RMDSZ) is also part, has been looking for a solution to curb the rise in the price of gas and diesel for days in response to growing social discontent.

Leaders of the Social Democratic Party (PSD) have urged the liberal energy minister to come up with a proposal to officially limit fuel prices, while National Liberal Party (PNL) politicians have been waiting for a solution from the Social Democrat finance minister, citing that a significant part of fuel prices consists of the VAT and excise duty.

Liberals say the price halt could lead to a shortage, while the Social Democrats have argued that there is no guarantee that the retail price will fall if the tax burden is cut.

Ciucă and Ciolacu did not specify the amount of price compensation to be introduced or the sources of funding, according to the Bucharest media.

In Romania, fuel has more than doubled in price since the beginning of the year. As seen on social media sites, motorists are organizing protests and paralyzing traffic at gas stations for hours by refueling with a small amount of gas. The National Association of Romanian Carriers (FORT) also called for an official restriction on fuel prices in a statement last week, citing the example of Hungary and Slovenia.

According to the price monitoring website operated by the Romanian Competition Council, the cheapest diesel in Bucharest on Wednesday was 9.16 lei (732 Hungarian forints) and the cheapest gas was 8.56 lei (684 forints) per liter.

Hungary introduced its fuel cap on basic diesel and petrol prices at 480 forints per liter last November; the measure is currently in effect until September.

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