Expert-Grup

Expert-Grup: Without Adequate Competition and with the New Permissive Regulatory Framework, Suspicions About Fuel Price Fairness Will Persist

Press releaseThursday, 11 July 20193401 views
Expert-Grup: Without Adequate Competition and with the New Permissive Regulatory Framework, Suspicions About Fuel Price Fairness Will Persist

Automatically translated summary. The full article is available in Romanian.

Independent Think Tank “Expert-Grup” has published an analytical note on Moldova's petroleum products market, prompted by a price increase of about 5% in mid-May. Programme director Vadim Gumene examines the new regulatory methodology, price comparability with the European Union and fuel quality, warning that doubts over pricing will remain.

According to Gumene, the new Methodology returns to the principles applied in 2007-2016, which proved unviable. Companies' reported profitability was even below the permitted limit, so the 10% cap was useless. Low transparency of costs and weak competition will, he argues, increase suspicions about the fairness of prices.

At first glance, prices of 0.97 euros per litre for petrol and 0.87 euros for diesel look lower than in the EU, but they include taxes that vary widely. Excluding VAT and excise duties, Moldovan prices are slightly above the European average, while company costs are much lower. Quality doubts persist, as there is no operational monitoring system. Gumene calls for re-evaluating the regulatory model with a view to full liberalisation, removing competition shortcomings and introducing quality monitoring in line with European standards.

View the original article in Romanian