Oil is heading towards the 100 dollars per barrel threshold most specialists had anticipated, after going beyond the 81-dollar record high this week. Are Romanian fuel consumers getting near their own psychological threshold with regard to prices at the pump?
To identify this concept, several major changes at the level of fuel consumption in Romania need to be highlighted amid the spectacular increase in oil prices. Namely the fall in fuel consumption and the shift to other means of transportation.
For now, however, all fuel price hikes have been accompanied by an increase in consumption and expansion of the car fleet of Romania, and specialists believe this trend will maintain.
Since the deregulation of the oil product market, Romanian consumers have experienced several waves of price hikes, all brought about by adjustment to international markets conditions. Still, Romanians annually purchase 7% more petrol and diesel oil and the car fleet expands by around 16% annually. Last year, the oil product market reached 3bn euros, namely 3.5 billion litres of petrol and diesel oil were sold.
"Petrol and diesel oil prices have registered an upward trend and still Bucharest is more and more crowded. Practically, I do not think there is such thing as a psychological threshold in terms of fuel prices," says Andrei Dumitrescu, marketing manager of Rompetrol Downstream.
According to him, the liberalisation of the oil market and hence its correlation to the trend of oil prices has not led to a decrease in the quantity of petrol or diesel oil a Romanian can buy at the current level of the average wage. Practically, these quantities have remained relatively the same with a single difference: petrol and diesel oil are no longer social products. Rises or cuts in pump prices are no longer a well-guarded secret and people do not queue up in front of petrol stations the night before a price hike by 1 ban (1 RON - 100 bani)
Compared with the level of final consumers, where there's no apparent major difference triggered by the trend of prices at the pump, changes have started surfacing at the level of oil companies.
"There are already some examples confirming a structural redistribution trend in the activity of oil companies. Besides Rompetrol, Lukoil announced investments in a biodiesel production unit, with few companies ignoring the segment of green fuel at this moment. The EU has set as a compulsory objective raising biofuel share in overall car fuels to 10% by 2020.
Hurricanes and other risk factors impacting the volume of oil supplies, doubled by US inventory decrease and the shrinking fund flows to the energy sector amid the weak performance of capital markets, are the elements that have led to the recent upsurges in oil quotes. Oil prices have risen by 33% since the beginning of this year alone.
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