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OMV Faces Extraordinary Tax in Romania

Published: May 19, 2012; 12:31 · (Vindobona)

OMV´s Romanian subsidiary Petrom is threatened by an extraordinary tax for oil companies. The tax should be introduced in 2013.

OMV Faces Extraordinary Tax in Romania / Picture: © Flickr

The Romanian oil industry is affected by a substantial tax increase. Above all, the Romanian government has its sight on OMV´s subsidiary Petrom. Oil companies were obliged to choose between a “voluntary” increase of the mining royalty or the impose of an extraordinary tax. The extraordinary tax is justified with “extraordinary profits”. In contrast to its competitors Lukoil, MOL and Rompetrol, Petrom recorded substantial profits last year.

In Romania, the tax is also called as “Robin Hood tax”. Not only the tensioned situation of Romania´s public finance, but also the relatively low mining royalties are the driving factors for Romania´s decision. A corresponding act will be resolved this year, the Minister of Economics Daniel Chitoiu announced.

What is more, Chitoiu is not satisfied with the oil production fee. The fee only reaches 0.8% of Romania´s GDP, he said. In Bulgaria, such a fee would reach 7% of the country´s GDP. In the EU, the average would be between 4.5% and 9.0%, the Minister said. As a result, the mining royalty should be raised up to the European level. The current royalty contract with Petrom expires in 2014.

Before, Romania´s President Traian Basescu criticized OMV sharply several times. Petrom posted a record profit last year, of € 886 m, which brought the president’s disapproval. “I am the one who cut all ties with Petrom, in protest over the excessive profit during a time of crisis,” said Basescu in March.

Petrom was taken over by OMV in 2004. OMV currently holds a 51% stake in the Romanian company. Recently, the Romanian government was said to sell further stakes of Petrom. However, Chitoiu stated that a further privatization of the remaining state-owned stakes in Petrom has “no priority”. In the medium run, a sale is considered, Chitoiu said.

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