The weapon of seduction: Petrom

Three quarters of the domestic fuel sector is divided between "OMV Petrom" and the "Rompetrol" and "Lukoil", groups, OMV being a price maker on the domestic retail market (at the pump).

The other competitors set their prices according to the reference price of "OMV Petrom".

This position gained by "OMV Petrom" relies on the advantages brought about by its integrated structure:

- Access to the domestic oil production, as its acquisition costs are (on average) at 37% - 43% of the international acquisition price.

The other companies are processing crude of which 30% is produced domestically and 70% comes from imports, but in the case of "OMV Petrom" the proportions are reversed - 85% of the crude is produced domestically, and 15% comes from imports, leading to consistent profits from oil exports, given the major differences between its costs and the international prices.

- Its own refining facilities (the "Petrobrazi" refineries and, up until recently, "Arpechim").

- its own distribution network (in Romania, the Republic of Moldova, in Bulgaria and in Serbia).

As a result, "OMV Petrom" can afford to keep low costs all across its network for the distribution of crude products at the pump, compared to the other distributors who resort to buying oil abroad or pay for refining services.

Due to the fact that "OMV Petrom" is the price maker for the price of fuel at the pump, this results in competitive pricing in the Balkan area, in order to preserve the attractiveness of all the three domestic operators ("OMV Petrom", "Rompetrol" and "Lukoil") over the competitors in Bulgaria and Hungary.

The potential elimination of one of the entities of the domestic market (in particular, "Rompetrol" and "Lukoil") would create openings that would be exploitable by other foreign suppliers, thus causing problems for the other two remaining operators, when it comes to maintaining the current benefits.