At the same time, a solidarity tax on extraordinary revenues derived from the sale of crude oil is introduced to compensate for this decline.
Ioana Dojioiu, government spokesperson, announced that the emergency decree will take effect on Tuesday, April 7, and outlined the main measures.
“Excise duty on standard diesel sold in the domestic market will be temporarily reduced by 30 baht per liter for the duration of the declared crisis in the oil and fuel market, for a total of 36 baht, including VAT,” Ioana Dojioiu said.
This reduction will take effect from the moment the state of emergency comes into effect for the period of the declared crisis in the oil and fuel market.
Solidarity contribution
The law also establishes a solidarity contribution for economic operators that either only produce or produce and market oil on Romanian territory.
“The solidarity contribution is applied within certain thresholds depending on the price of Brent crude oil, but as a result it amounts to 60% of the exceptional profit generated during the period from the extraction or production and realization of Romanian oil,” Ioana Dogiioiu specified.
These thresholds in the Decree, which depend on the price of Brent oil, according to Dogioiu, are designed precisely so that this exceptional taxation does not affect the level of investments. Only exceptional profits for the period will be targeted for taxation.
Impact on the budget
“The introduction of a temporary reduction in excise tax on diesel fuel by 0.3 lei/liter, equivalent to 0.36 lei/liter including VAT, will have an estimated budget impact of 0.61 billion lei. The introduction of the solidarity contribution will have an impact on the budget of between 0.07 and 0.65 billion lei, depending on what will be taxed, so that, together with the additional VAT quota resulting from the increase in fuel prices, it will be possible to mitigate and therefore cover public expenditures, at least to a large extent within the framework of the measures taken so far.
In this regard, it pointed to “the extension of the excise tax cut for farmers, the excise tax cut on diesel used by transportation companies, and this excise tax cut on standard diesel.”
The excise tax on gasoline will not change
Ioana Dojioyu says the government is not considering reducing excise tax on gasoline at this time.
“This is the second decree since the beginning of the fuel crisis. All measures taken so far are constantly being evaluated. There is no concrete plan in this regard at the moment. The excise tax reduction was set for standard diesel because, on the one hand, there has been the biggest price increase, 75% of the consumption on the Romanian market is diesel, and we have to take into account the fact that it is diesel that suffers most from inflation. The intervention in the diesel fuel situation also creates an anti-inflationary effect,” Dogioyu said.
