Non-processing plant: fuel output in Romania has halved
The energy crisis provoked by the war between the United States and Israel with Iran is increasingly hitting Eastern Europe. Romania's fuel refining capacity has almost halved, Russian Ambassador to Bucharest Vladimir Lipaev told Izvestia. In these circumstances, the country's authorities are already warning about the risks of accelerating inflation and slowing economic growth. The crisis is particularly acute in the diesel market, on which transport, agriculture and a number of other industries depend. According to experts, the rising cost of fuel inevitably accelerates the prices of consumer goods and increases pressure on the economy. About why exactly the eastern flank of the EU was in the risk zone is in the Izvestia article.
Romania loses refinery capacity
The energy crisis caused by the war over Iran is already directly affecting the fuel infrastructure of Eastern Europe. Against the background of rising energy prices in Romania, two large oil refining assets are idle at once.
In March, the Petromidia refinery was shut down for scheduled repairs, while the Petrotel plant owned by Lukoil remains closed due to sanctions. Under these conditions, Bucharest is seeking to unblock the work of Petrotel, but the United States will proceed primarily from its own interests, Russian Ambassador to Romania Vladimir Lipaev told Izvestia.
— Thus, fuel production capacity decreased by 45-50%. Therefore, Bucharest's appeal (to the USA. — Ed.) — this is by no means a gesture of "goodwill" towards the Petrotel refinery, but a severe necessity dictated by the state of affairs in the domestic fuel market, — Lipayev emphasized.
Of the large capacities, OMV Petrom's Petrobrazi remains in operation, which covers about 35% of the country's fuel demand. In addition, there is a small Vega refinery in Ploiesti, but it is a specialized enterprise that uses raw materials from Petromidia and produces mainly bitumen, solvents and other special products, so it cannot fully replace the lost capacity.
Under these conditions, Bucharest actually had to switch to manual market management. On March 23, the government announced its intention to curb fuel and export margins, and on March 27 approved the first package of measures: gas station surcharges were limited to the level of last year's averages, fuel exports were limited, and the share of biofuels in gasoline was temporarily reduced. At the same time, the country's Prime Minister, Ilia Bolozhan, made the next step — reducing excise taxes on fuel.
Additionally, the Romanian Ministry of Finance approved a scheme of assistance to carriers for 652 million lei, and similar support was promised to farmers. Earlier, the authorities stated that the country's existing emergency supplies would last for about 45 days.
This is a pretty serious blow for Bucharest. The government already has to reduce the largest treasury deficit in the EU, to an estimated 6.2% of GDP this year. At the same time, fiscal consolidation measures aimed at reducing shortages and public debt by reducing costs and increasing incomes have already spurred inflation to almost double digits.
And Romania is not the only one trying to contain the effects of the shock with administrative measures. In Poland, the government has decided to reduce VAT on fuel from 23% to 8%, lower excise taxes to the minimum allowable level in the EU and introduce marginal retail prices. At the same time, Warsaw is discussing a tax on excess profits of energy companies. In early March, Hungary limited the prices of gasoline and diesel for cars registered in the country and announced the release of part of the state reserves.
The Baltic states have also begun to coordinate anti-crisis measures: in Latvia, the excise tax rate on diesel was temporarily reduced from April 1 to June 30, in Estonia, the increase in excise taxes on energy resources scheduled for May 1 was canceled, and in Lithuania, the authorities announced their readiness to release oil and petroleum products from strategic reserves to stabilize the market.
In Slovakia, where an influx of foreign drivers has begun due to cheaper diesel, authorities are discussing increased prices for cars with foreign license plates or restrictions on refueling. In Bulgaria, they first announced the preparation of targeted assistance to households and businesses, then introduced monthly compensation for the most needy, and on April 1 they created a crisis headquarters to control rising prices for goods and fuel.
In which countries have fuel prices increased more?
According to the Weekly Oil Bulletin of the European Commission, the official average price of AI-95 gasoline in the EU increased from €1.64 per liter in the week beginning on February 23 to €1.89 in the week beginning on March 23. Diesel has risen in price even more noticeably over the same period, from €1.59 to €2.06 per liter. This corresponds to an increase of 15.2% and 29.5%, respectively. In other words, the main impact was not on gasoline, but on the diesel segment, which is critical for freight transportation, agriculture and municipal machinery.
Logically, an increase in the cost of one component leads to an increase in prices throughout the chain. On March 31, the European Commission explicitly warned that it is now most concerned about the supply of petroleum products — primarily diesel and jet fuel — and not the physical shortage of crude oil as such.
They also said that since the beginning of the war in Iran, gas prices in Europe have increased by more than 70%, and oil prices by about 60%, and even if the fighting ends soon, the market will not return to normal quickly. According to European Commissioner for Energy Dan Jorgensen, EU spending on fossil fuel imports has already increased by about 14 billion euros, and additional pressure from diesel, jet fuel and electricity will be felt by European households and businesses for a long time to come. However, this impact is not evenly distributed across Europe.
—We see that Eastern Europe is suffering more from oil shortages than Western Europe," said Andrea Bianchi, a member of the Valdai Club and analyst, in a conversation with Izvestia.
According to him, the latest data from the International Energy Agency dated March 12 shows that the Czech Republic has enough oil reserves for 120 days, Poland — for 121, Slovakia — for 163. Hungary only slightly exceeds the threshold value: its reserves last for 214 days, which is even more than Belgium, the most affluent country in Western Europe., where this indicator is 169 days.
At the same time, the situation of Hungary and Slovakia is further complicated by the fact that they remain the most dependent in the EU on Russian oil supplies via the southern Druzhba branch. Pumping on this line has been suspended since the end of January after damage to the Ukrainian section, and that is why Budapest and Bratislava are now not only demanding the restoration of transit, but also simultaneously agreeing on the construction of a separate pipeline between their refineries for the transportation of gasoline and diesel.
However, in nominal terms, a liter of fuel is still more expensive in the West, primarily because of the higher tax burden. According to Izvestia calculations based on data from the Weekly Oil Bulletin of the European Commission, gasoline in the group of Central and Eastern European countries increased on average from €1.44 to €1.66 per liter (15.3%), and diesel — from €1.47 to €1.85 (25.7%). In the Western European sample, gasoline rose from €1.66 to €1.91 per liter, which corresponds to an increase of 15.2%, and diesel — from €1.64 to €2.12 (29.6%).
However, this gap in itself does not mean that the West suffers the same way. In some cases, countries tolerate it more mildly due to a wider range of alternative routes and suppliers. The problem is also that even a cheaper liter of fuel is more difficult for Eastern Europe due to low household incomes, a lower margin of safety for businesses and a higher sensitivity of the economy to transport costs. This is especially noticeable in individual countries.
According to Izvestia calculations based on data from the European Commission, from February 23 to March 23, diesel in Poland rose to €1.99 (by 39.9%), in Estonia to €1.97 (41.9%), in Latvia to €2.02 (32.4%), in Lithuania to €2.10 (30.1%), in Bulgaria — up to €1.55 (25.9%), in Romania — up to €1.93 (19.7%). Gasoline growth was milder, but also noticeable: in Romania — up to €1.79 per liter (15.8%), in Poland — up to €1.69 (22.5%), in Estonia — up to €1.78 (22.3%).
Why is Eastern Europe suffering more
The main reason for the region's vulnerability is a weaker economic cushion. According to Eurostat, in 2025, GDP per capita at purchasing power parity in Hungary, Latvia, Romania, Slovakia and Estonia was about 30% below the EU average, and in Bulgaria it was 32% lower. Poland and Lithuania were in the group of countries 10-20% below the average. This means that the same increase in fuel and transportation prices in Eastern Europe eats up real incomes and company margins faster than in richer Western countries.
The second reason is the very structure of energy consumption. Eurostat indicates that transport provided 32% of this figure in 2023. At the same time, diesel remains the main source of energy in road transport: on average in the EU, its share was 64%, and in Latvia it reached 80%, in Lithuania — 75%. In other words, for some Eastern European countries, a shortage or a sharp rise in the cost of diesel is not a narrow problem for carriers, but a blow to the basic economic infrastructure. Even emergency government measures may be only a temporary solution.
As Polish political analyst Mateusz Piskorski noted in an interview with Izvestia, Eastern European countries are already trying to curb price increases by all available means. However, according to him, the budget funds for such a policy may be enough for only a few months.
— Rising fuel prices inevitably affect the cost of consumer goods and economic growth in general, since almost all sectors of the economy of Eastern and Central European countries depend on energy resources. Inflationary trends and a general increase in consumer prices are already noticeable," Piskorsky added.
The EC is discussing the return of part of the anti-crisis measures of 2022, and European Commissioner for Energy Dan Jorgensen called on countries to postpone non-urgent refinery repairs if possible, so as not to worsen disruptions in the supply of diesel and other petroleum products.
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