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The government could surcharge gas and electricity companies - sources

May 27th 2015 at 2:57 AM

"There are discussions in the Government on the oil and gas royalties. These could be increased until 2014, with the liberalization of the electricity and gas prices. Another option is taxation of gas and energy companies, that will be some profits to be to do nothing, "sources said. Authority’s novels were engaged in negotiations with the IMF to develop by the end of April a timetable for eliminating tariffs in natural gas.

Until then, authorities intend to consult with the relevant companies on the market to prepare a package fees, royalties and regulations in the oil and gas sector, reads the last letter of intent agreed by the Government with the IMF. In the past three years, the state has received annual royalties of over one billion lei per year for all types of exploited resources to be paid this fee.

Thus, in 2009 the state budget came to 1.03 billion lei representing royalties, revenues from 2010 being close to that amount. Last year, the royalties charged by NAMR amounted to 1.37 billion lei, according to Ziarul Financial. Prices paid by the population are regulated by the National Energy Regulatory considerations of social protection, but the European Commission and the IMF asked the Government to liberalize the market, to bring them to the level of the bloc. An official document reveals that the deregulation of the electricity market for households begins in July, at which time the share of the electricity supply from the competitive market will increase to 10%. For residential consumers in regulated tariffs will be removed ten stages by December 2017.

In addition, the regulated tariffs for industrial consumers will be elim in six stages, the first stage is scheduled for September 2012 and the last in January 2014. An old problem 2004 oil and gas royalties issue is debated extensively in the media and at political level in 2004, the privatization of the largest Romanian company, Petrol , acquired by OMV Austria. The contract forprivatization of Petrol provided as the oil royalties will be maintained for a period of 10 years from the closing of the privatization.

The transaction was completed in December 2004 so that royalties cannot be changed for Petrol by early 2015. According to the Petroleum Law, published in the Official Gazette on 15 June 2004, the share paid for exploiting of oil is between 3.5% and 13.5% of production royalty is higher for a higher output of oil from a reservoir.

"The current level of royalties for oil and gas cannot be changed because it is stipulated in the law and the privatization of Petrol oil and gas laws. Instead, the government is thinking about higher taxation of oil companies, gas and eleectricitate ", added the sources. Since 2004, more politicians, including President Traian Basescu , the topic of increasing royalties, but no government has undertaken suplimenatrea concrete actions idfentificarea tax or another form of taxation.

Basescu said in March, Petrol should expect to pay royalties as from 2014 as the Arab states and tabulate the amount of royalties paid by the oil company is currently "extremely unfair negotiated" and "miserable". Basescu added that "unfortunately, the contract is written such that you cannot do anything" in the sense of changing levels of taxation. The main payers of royalties for oil and gas production are OMV Petrol and Romgaz . The two covers over 90% of domestic production. Moreover, OMV Petrol is the sole producer of oil in Romania. Petrol recorded substantial profits in the past seven years, the loss of nearly one billion lei in 2004, the year the company was privatized. In 2005, Petrol had a profit of 1.4 billion, and last year recorded the largest gain in its history, 3.6 billion lei. Romgaz is one of the most profitable state companies, in six years with profits of over 500 million lei annually. Romgaz Last year was a gain of 762 million lei.

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