ANDREEA PAUL VASS: The price of gas - rising in Romania, dropping in the EU - 27.02.2012

Since the beginning of the year, the price of gas in Romania has increased 4.2%, and the price of Diesel fuel has risen 3%, says Andreea Paul Vass, State Adviser to the Prime Minister. During this period, in the European Union (EU), the price of gas fell 2.2%, whereas that of diesel fuel fell, according to him. Andreea Paul considers that this can be explained through the fact that competition in the EU is harsher than in Romania, which means that he influence of international oil quotations isn't as quickly taken into account as it is here.

Starting with January 12th, 2009, the price of gas in Romania increased 93%, to 1.285 Euros/liter, from 0.666 Euros/liter, whereas in the EU it has increased only 49%, from 1.023 Euros/liter to 1.519 Euros/liter, she said.

Over the same period of time, the price of diesel oil rose 68% in Romania, from 0.790 Euros/liter to 1.324 Euros/liter, whereas the EU average was 48%, as the price reached 1.465 Euros/liter, from 0.989 Euros/liter, State Adviser to the Prime Minister.

Andreea Paul says that we have the second lowest price of gas and the fourth lowest price of diesel oil at the EU, or 15%, and 10% respectively, below the average of the union.

• Analysts: Possible impact on inflation

Liviu Voinea, the executive director of the Group for Applied Economics (GEA), said that the increase in the price of fuel will result in an increase in the price of goods all across the economy. According to his estimates, if fuel prices were to rise by 10%, inflation would increase by about 0.7%.

Analyst Bogdan Baltazar expects that the new increases in the price of fuel would have an important effect on the Romanian economy, but not big enough to lead to an intervention from the NBR.

Economic analyst Florin Cîţu considers that the increase in the price of fuel will affect the price of industrial output, but it is too early to predict how inflation will evolve. The NBR doesn't usually look at such shocks of a temporary nature, and will only intervene if we were to experience second round effects, because that would mean that the shocks have become permanent, he said.

According to economic analyst Ionel Blănculescu, the other oil companies in Romania will also raise the price of gas and diesel oil in the coming period. Also, fuel will become more expensive across the entire European Union, because of the tense situation in the Ormuz strait, he said.

• Iran benefits from the rise in the price of oil

This month, the price of crude was influenced by the escalating tensions between Iran and the Western countries, concerning the controversial nuclear program of the former, which the latter claim has military purposes, whereas Iran denies the claims.

Prices soared after Iran announced it would halt exports to Great Britain and France.

The 27 EU member states had previously decided to halt imports of Iranian oil starting with July 1st. In an interview granted to BURSA last week, His Excellency Iranian Ambassador in Romania Bahador Aminian Jazi said, that the tirade of statements concerning the nuclear program, threatening a possible military attack on his country, merely represents psychological warfare, which are influencing the price of oil, which in turn benefits his country's economy. "This works in our favor and against the Europeans. The rise in the price of oil works in our favor, because we are exporters", the ambassador said.