Ilie Bolojan, on the measures taken in the fuel crisis: “We are acting within the limits of possibilities. The government does not have any benefit from the increase in prices”
Prime Minister Ilie Bolojan said on Saturday that the Government is trying to limit the effects of the fuel crisis within the existing budget limits and claimed that the state has nothing to gain from the increase in fuel prices, in the context of blocking the transport of crude oil through the Strait of Hormuz.
“One month after the start of the war in the Middle East, the effects of the blockade of the transportation of crude oil and derived products to the countries of the world are being felt by both citizens and governments. These effects are manifested in particular by the increase in the prices of fuels, agricultural fertilizers and higher interest rates,” the Prime Minister wrote in a Facebook post.
“If the conflict is prolonged, economic growth will be lower everywhere in the world, and inflation will increase globally. All countries in the global economy will be affected, and Romania cannot be an exception,” continued Bolojan.
“We cannot cancel these effects, but we can only limit the costs within the limits of the possibilities we have”, added the prime minister.
He emphasized that the adopted measures are conditioned by the budgetary situation: “We act within the limits of the possibilities we have, as a result of the very large budget deficits of the past years and the constraints of the present.”
At the same time, Ilie Bolojan rejected the idea that the state would benefit from the increase in fuel prices. “The government has no benefit from the increase in fuel prices. On the contrary,” he said.
According to the prime minister, the additional revenues generated by price increases are lower than the costs borne by the state to mitigate the effects of the crisis. According to the estimates of the Ministry of Finance, between 100 and 110 million lei would be collected from VAT in one month, given an average fuel price of 10-10.2 lei.
The government approved on Friday, in an extraordinary meeting, the draft Emergency Ordinance aimed at reducing the excise duty on diesel fuel by 30 banis, a measure intended to directly reduce the price at the pump. At the same time, to compensate for this reduction, a solidarity tax is imposed on the exceptional revenues obtained from the sale of crude oil.
“Why only diesel? In Romania, diesel consumption represents over 75% of the total fuel consumption, gasoline representing less than 25%. In addition, diesel price increases were double those of gasoline. Also, the cost of diesel affects the price of transporting goods and passengers, the cost of operating machines and heavy machinery in construction and industry, prices in the economy, in general, and, implicitly, the cost of living,” Bolojan wrote on Saturday.
