Romania Introduces Excise on Fuel, Gas, Cigarettes

World | April 1, 2014, Tuesday // 13:30|  views

Romania's Prime Minister Victor Ponta has been firm over the last months that a fuel excise must be introduced in the country, Photo by EPA/BGNES

Romania's excise on fuel, gas and tobacco has come into force, in compliance with an agreement that Bucharest struck with the IMF.

From Monday, fuel prices in Romania will increase with EUR 0.07 per liter, a pack of cigarettes will go up by EUR 0.6 to EUR per liter, and gas will be 2% more expensive for consumers has reported.

These changes mean that Romania, the EU's second-poorest country after Bulgaria, is to rank ninth among top ten states with high diesel price and 19th in terms of gasoline.

The excise has led to mounting tensions between the Presidency and the Council of Ministers.

President Traian Basescu has called the introduction of new taxes as "a sadistic measure" and has asserted additional revenues could be gathered through amending the state budget.

Basescu however agreed in March to back the move, in an attempt to ensure that the IMF deal was to be signed.

According to Romanian media reports, Prime Minister Victor Ponta has accused Basescu of "populism and hypocrisy".

It is estimated that new excises will add LEI 2.5 B (rougly EUR 561 M) to the national revenues.

On March 6, the IMF announced it had agreed with authorities in Bucharest on a USD 4 B (EUR 2.9 B) loan to Romania.

This was the third financial package by the fund after the beginning of the European crisis, with a total of USD 20 B (EUR 14.5 B) assigned in 2009-2010 to ensure fiscal stability.

Romania has made severe budget cuts in return, prompting social discontent which even culminated in a political crisis and a personal conflict between Basescu and Ponta in the summer of 2012.

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Tags: Romania, Basescu, Ponta, IMF, excise, fuel, gas, budget


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