PM says Moldova has lowest fuel prices in region, country must make sure it has necessary volumes

Prime Minister Vasile Tofan today said that Moldova currently had the lowest fuel prices in the region, due to the regulated method of setting them. In the context, the authorities must also make that the country has the necessary volumes of oil products and that they do not go primarily to other markets of the region, where prices are higher in the context of market liberalization.

“People deserve full transparency regarding the price formation procedure in Moldova and what the advantages and disadvantages of this procedure are. Allow me to explain. For the moment, for example, for diesel, as of July 27 the maximum price was 30.71 lei. The price is formed as follows: the National Energy Regulatory Agency (ANRE) calculates the average price on the international exchange for the last 14 days, adds the excise duty to this price, adds value added tax (VAT) and a regulated margin, meaning a small, regulated margin for producers, for importers, which allows them to cover their logistical and other costs. Now, the good part of this formula is that we have the lowest diesel price in the region, because we regulate the price. With July 27 price of 30.71 lei, in Ukraine, for example, where the market is free and unregulated, the pump price is 35 lei. In Romania, it is nearly 40 lei,” said Prime Minister Vasile Tofan at the beginning of a today’s extraordinary government meeting. At the event, the  cabinet of ministers ruled to introduce a state of alert in the energy sector.

At the same time, the PM stressed that, in addition to good prices, the authorities must ensure the availability of stocks.

“The good part is that we have the lowest prices. The bad part is that, having the lowest prices, often, especially when there is a diesel shortage on the market, volumes go where prices are higher. And now, our challenge is to find the balance between keeping prices as low as possible, because we want low prices for our consumers and farmers, and not allowing a deficit in which volumes will migrate to a free market where prices are higher. I repeat once again, we are the only country that has regulated prices. In Romania and Ukraine prices are fully liberalized. We intend to maintain this regulation mechanism; it is very important for us to continue to control prices, to prevent excessive prices, but at the same time, to manage things properly, to make sure we have volumes and that they do not go to regions with higher prices,” said Prime Minister Vasile Tofan.

The government today introduced a state of alert in the energy sector for a period of 30 days, in order to prevent risks to the country’s fuel supply, in the context of disruptions on the regional market.