Romanian Association of Petroleum Exploration and Production Companies (ROPEPCA) claims the tariff increase charged by the state company Conpet for the transportation service through the national pipeline transportation of crude oil, gasoline, condensate and ethane extracted from the Romanian fields will have negative effects over the industry. The association is observing that the process of public debate and consultation agreed with authorities was not finished as promised and believes that “the NAMR decision contradicts one of the first priorities undertaken by the Ministry of Energy, namely to support domestic production”, says Artur Stratan, President of ROPEPCA.
ROPEPCA brings together 19 companies, most active in the onshore industry in Romania, including Amromco, Aurelian Petroleum, Expert Petroleum, Hunt Oil, NIS Petrol, OMV Petrom, Repsol and Zeta Petroleum.
In a press release, ROPEPCA warns the Romanian oil sector will be strongly affected by transport tariff increase in an unfavorable context for crude price and over taxation of operations. “Additional pressure brought by Conpet tariff increase to nearly 80 RON/ton of crude piped could threaten the survival of an entire economic sector and can create a dangerous precedent for future similar actions”, the statement underlined.
According to the association, the price advance of domestic crude oil transmission service and products associated by more than 1.4% and the higher price for import crude transportation service “will increase by more than 1 million euros, compared to last year, the amounts paid by the domestic producers of hydrocarbons for this service, although production is declining, the trading price remains at unsustainable levels and taxation is maintained at higher rates than the European average”.
Calculations made by ROPEPCA show that “the increase is likely to erode further the competitiveness of crude oil from domestic production, while just the decrease in oil prices caused an increased share of the transmission tariff from 3% of the value of a barrel in 2014 to over 7 5% at current prices. Such a measure may boost crude oil imports, while the trade deficit increased by 38% in 2015 compared to 2014”.
The increase decided by NAMR was taken in a context in which, from year to year, the amount of domestic crude transported by Conpet decreases, a trend exacerbated by the general climate of global hydrocarbon sector, which affects Romania.