Romania's Governing Coalition Agrees on Phased Fuel Excise Duty Reductions to Curb Prices

Romania's governing coalition met on Monday, March 30, at Victoria Palace to address surging fuel prices, agreeing to form a working group tasked with proposing a phased reduction of excise duties on fuels and extending a cap on commercial markups for basic food products for an additional three months. The PNL-PSD-USR-UDMR coalition stopped short of announcing a final decision on the excise cut, mandating the working group to finalize the specific parameters of the measure. Standard diesel prices at major Romanian fuel stations reached between 10.25 and 10.43 lei per liter on Monday, with premium diesel selling as high as 10.99 lei per liter at some outlets, according to data cited by Adevarul. Coalition leaders attributed the price surge to the ongoing war in Iran, which has disrupted global oil markets. Prime Minister Ilie Bolojan had signaled as early as the previous Thursday that the government would "most likely" cut the excise tax, according to G4Media.

Working group to finalize phased excise cut details The working group mandated by the coalition includes Deputy Prime Ministers Marian Neacșu and Tánczos Barna, Finance Minister Alexandru Nazare, Energy Minister Bogdan Ivan, and Economy Minister Irineu Darău. According to coalition sources cited by G4Media, the government is expected to implement an initial excise duty reduction of 10% in the first phase, with the percentage set to increase if fuel prices continue to rise. Sources cited by Digi24 and Adevarul described a scenario in which an initial cut of approximately 5% could be considered, with phased expansion tied to market developments — specifically, a proportional reduction for every approximately 5% increase in oil or pump prices. All sources agree the reduction would be capped at a maximum of 25%, due to budgetary constraints. The option of a 45% excise duty reduction was reportedly abandoned after the Ministry of Finance opposed it, citing insufficient budgetary resources. The final measures are to be adopted by emergency ordinance.

Petrom: 10.25, Lukoil: 10.32, OMV: 10.41, Rompetrol: 10.43, Mol: 10.43

VAT cut ruled out over EU infringement risk A reduction in VAT on fuel has been effectively ruled out by the coalition, according to multiple sources. Prime Minister Bolojan explained that cutting VAT is problematic because Romania risks triggering an infringement procedure from the European Commission, given the limitations imposed at the European level. Energy Minister Bogdan Ivan had publicly argued on Sunday for either a standard VAT rate reduction or a proportional excise duty cut, framing the measure as a way to return to citizens the additional VAT revenues the state was collecting during the period of elevated prices. „A real decrease in the final price at the pump can come, in addition to market-regulation mechanisms, in addition to mechanisms for regulating commercial markups and taxing some exceptional incomes, only from two sources that are directly related to the fiscal segment of the fuel price” — Bogdan Ivan via Digi24 Energy expert Dumitru Chisăliță cautioned that the essential question was not merely whether excise duties or VAT could be reduced, but where, by how much, and when, so that the measure would not affect pension payments, public sector salaries, or other mandatory state obligations. „The essential problem is not only whether they can be reduced, but where, by how much and when, so that the measure does not affect other state obligations, such as the payment of pensions, salaries and other essential public expenses” — Dumitru Chisăliță via Adevarul Chisăliță calculated that any annual fiscal cost should not exceed 0.1 to 0.15 percent of GDP — equivalent to roughly 2 to 3.1 billion lei — unless offset by additional revenues or cuts to non-essential expenditures, based on a GDP estimated at approximately 2.045 billion lei for 2026.

Grindeanu absent as food markup cap extended Sorin Grindeanu, the president of the Social Democratic Party, did not participate in the coalition meeting, according to Digi24 sources, in an absence that drew notice given the significance of the decisions under discussion. The coalition separately confirmed the extension of the cap on commercial markups on basic food products for an additional three months, a measure designed to shield consumers from broader inflationary pressures. A government spokesperson confirmed that a preparatory working meeting had taken place at 09:00 on Monday, ahead of the coalition session at 13:00, at which "scenarios, hypotheses and figures were presented" without formal decisions being made. Bolojan also noted that a previously adopted emergency ordinance allows the government to ban fuel exports, but said Romania would not impose such a ban at present, citing a surplus of gasoline from domestic manufacturing processes that requires export. Romania has faced persistent fiscal pressures since 2024, when the country's budget deficit became one of the largest in the European Union relative to GDP. The nine-month-old coalition government of four pro-European parties enforced tax increases and state spending cuts to reduce the deficit, according to Reuters. Romania's Black Sea crude oil refinery Petromidia, the country's largest, was scheduled for a maintenance shutdown in March 2026, adding to supply-side pressures on the domestic fuel market, as reported by Reuters. The coalition's decision to act through a working group rather than announcing immediate measures reflects the tension between the urgency of consumer relief and the government's stated commitment to fiscal discipline under EU oversight.