Fuel prices should be reduced by setting reasonable excise duties, expert
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17:14, 12 Jun 2018

The fuel prices should be reduced and the instrument by which the state can do this is to set reasonable excise duties. But this depends on the approach of the authorities, which often invoke the fact that the excise duties and prices in Europe are higher. Therefore, a complex approach is required, which should first of all take into account the population’s incomes. Being a small country, the Republic of Moldova cannot control all the flows at the border. Given that the economy is open, the prices should be correlated with those in the immediate vicinity of the Republic of Moldova, including the region that is not controlled by the Moldovan authorities, where the prices are lower, stated Sergiu Gaibu, programs director at the Institute for Development and Social Initiative “Viitorul”.

“Even if the fuels in the Republic of Moldova are cheaper than at least in the countries that are westwards, we have substantially lower incomes and, if we do some calculations, like, for example, how many liters of fuel can be bought with an average official salary, we will see that the Republic of Moldova is at the end of the list,”  the expert has told IPN.

According to Sergiu Gaibu, the higher excise duties affect the honest consumers, while those involved in the so-called small smuggling or small border trafficking with the Transnistrian region and Ukraine benefit from this, causing damage to the state budget. The excise duties should be adjusted so that the prices do not differ much from those in the neighboring states, especially those to which travel is free.

The expert considers that if the excise duties are reduced, the loss will not be proportional (or state budget losses will not be sustained at all) to the losses generated by the border trafficking. “The excise duty should be reduced to a reasonable level, comparable to that in these regions, so as to eliminate the wish to become involved in small smuggling or small border trafficking as it is the people’s right to go there and fuel their cars,” said Sergiu Gaibu.

He noted the Government that does a lot of analyses should propose amendments to the methodology so that this meets the economic realities in the country.

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