December 11, 2014 / 9:09 AM / 5 years ago

Romania extends taxes on gas producers, energy firms through 2015

BUCHAREST, Dec 11 (Reuters) - Romania’s leftist government decided late on Wednesday to extend a series of taxes on energy firms by one year through 2015 to make up for a potential revenue gap as it delayed renegotiating its royalty taxes on natural resources.

Last year the government said it would tax gas producers Petrom and state-owned Romgaz up to 60 percent on income earned as a result of price hikes introduced under the country’s energy market deregulation.

It also introduced a tax for electricity and gas transporters and distributors, including local units of Czech CEZ, Italy’s Enel and Germany’s E.ON .

A tax of 0.5 percent of turnover was imposed on firms exploiting natural resources, including oil, coal, uranium, ferrous and non-ferrous metal ore.

The taxes were initially meant to run until end-2014. The government estimates it will collect around 1 billion lei ($281.08 million) from them next year.

Romania, one of the European Union’s poorest states, produces gas and coal but analysts say relatively low royalties prevent it from making the most of its energy resources.

The country has left royalties unchanged for the last 10 years, a condition it agreed to under the 2004 privatisation of oil and gas group Petrom, now owned by Austria’s OMV.

In June, government officials said they would introduce a new royalty tax system by the end of the year to reflect the difference in costs between onshore and offshore extraction of oil and gas.

But earlier this month, leftist Prime Minister Victor Ponta said the cabinet had postponed the royalty tax changes as a wider parliamentary debate was needed to give energy investors a more stable business environment.

Shares in oil and gas group Petrom were 0.5 percent down on the day on Thursday, extending losses from earlier this week and hitting their lowest level in more than two years. Traders said news of the tax extension had added to negative sentiment after this year’s plunge in oil prices.

Hungary has also imposed windfall taxes on mainly foreign-owned energy companies in recent years. ($1 = 3.5577 lei) (Reporting by Luiza Ilie; Editing by Catherine Evans)

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