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Cosmo and Nanu - Fantasy

Government to introduce ‘Robin Hood’ tax on oil companies

Minister of Economy Daniel Chitoiu announced today (Weds) that the government is working on a piece of legislation on introducing a supplementary tax on the exceptional incomes of the oil companies that should be passed by the year end and implemented as of 2013.

The only company to be taxed with the Robin Hood tax is OMV-Petrom, as it is the only oil and gas company to report profit.

OMV Petrom posted an all time record profit in 2011.

In February, OMV Petrom reported net profit rose 72 percent on the year to a record 883 million Euros in 2011, fuelled by higher crude oil prices and lower costs.

The company’s turnover in 2011 stood at 5.3 billion Euros, the highest ever posted by a company in Romania. President Traian Basescu attacked the companies for regularly increasing the petrol prices and abusing its monopoly position.

OMV Petrom is the only company in Romania that has access to the extraction of oil and gas at lower costs than the other market players. The extraction of a barrel of oil costs Petrom only 0.1 UD dollars/litre, while the company sell it on the domestic market with some 1.71 US dollars/ litre.

The new minister told a press conference that the Executive will increase the level of royalties on the natural resources as of 2014, in order to bring them to the EU levels. The current royalties for oil and natural gas had been limited between 3.5 and 13 percent in the Oil Law, following the privatization contract with Austria’s OMV for the national company Petrom.

According to a recent study conducted by Bloomberg in 55 countries, Romania is among the countries with the highest price taking into consideration the living standard.

Of the EU countries in the study, Romania’s USD 6.59 per gallon (about 4 litres) was the cheapest and regionally, only Russia has lower prices. But due to the low average wages, Romania’s ‘pain at the pump’ rating was high, with a gallon of petrol costing 25 percent of the average daily wage.

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