Govt. report: Romanian gas price increases, groundless

The hike in 2010 of pump prices in Romania was groundless and did not reflect the evolution of international quotes for crude oil, exchange rates and duties and fees, while most of the local oil firms reported significant losses, and their real profits were not reflected accordingly. The Government's conclusion is shown in the report analyzing the producers and distributors of gas and diesel oil, which was sent to the prime minister for analysis and obtained by Mediafax newswire. The main companies selling fuel in Romania are OMV Petrom (SNP.RO), Rompetrol, LukOil, MOL. Pump prices increased by around 20 percent in Romania last year. According to the report, local fuel companies have groundlessly increased pump prices in 2010, even though production and distribution costs remained almost the same (except for the VAT growth from 19 percent to 24 percent). Consequently, this situation should generate much higher profits for the companies, and, thus, higher taxes per profit, the document says. "The data presented by the oil companies show that the tax share in the pump prices' structure dropped from 52.5 percent at the beginning of 2010 to 49.8 percent at yearend, so that the pump prices' increase level cannot be justified from the fiscal point of view," the report says. Mediafax