The need for diesel is putting the greatest pressure on the Romanian and European fuel market, according to energy minister Bogdan Ivan. The accelerated increase in oil and fuel prices is driven by the imbalance between supply and demand, as states have increased their reserves, while production is affected by the conflict in Iran.
The price of Brent oil, a benchmark for global oil prices, has risen from about USD 70 per barrel before the start of the war in Iran to over USD 110 per barrel. After US president Donald Trump announced a two-week truce with Iran, the price dropped to roughly USD 93 on Wednesday, April 8.
With the announcement, prices at the pump in Romania decreased as well. As of Wednesday morning, drivers around Bucharest pay RON 9.12 to 9.20 (EUR 1.79) per liter of gas and RON 9.93 (EUR 1.95) for diesel.
Before the truce, scenarios placed prices at USD 150 or 200 per barrel had the war continued. The greatest concerns regarded diesel, the primary fuel in Europe. In Romania, the imbalance is clear as well. Annual production is about 5.5 million tons, while consumption reaches nearly 7 million tons, forcing the country to rely on imports.
“We consume more than we produce in the case of diesel,” Ivan explained, cited by Economedia. Diesel accounts for about 70% of total fuel consumption, which amplifies the impact of price increases.
Globally, the situation is worsened by a reduction in production, estimated at 25%, as well as increased demand. In this context, the price of diesel has doubled, from about USD 730 per ton before the war to over USD 1,400 before the truce was announced.
Last week, the Romanian government temporarily cut the excise duty on standard diesel and introduced a solidarity contribution on revenues from the sale of crude oil and refined petroleum products in the country. Although the measures were taken with a delay, the energy minister argued they have had an effect in limiting price increases.
He also assured that there is no risk of Romania running out of fuel. A similar conclusion was announced by the Romanian presidential administration after meetings with energy companies. Romania has about 2 million tons of oil in strategic reserves.
“We are not in a crisis where the product is lacking. We have stocks and supply flows that do not put us in danger, at least until the end of May,” Ivan stated. However, delays in deliveries caused by the attacks in Novorossiysk and in the Gulf of Finland have put certain oil terminals under pressure.
Authorities assure that fuel rationing is not being considered. The situation may change if there are major blockages in the Suez Canal or major refineries in the Middle East, where a lot of Romania’s diesel imports originate.
(Photo source: Inquam Photos | George Calin)
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