The National Agency for Energy Regulation (NAER) proposes setting a ceiling on the selling prices of oil products every two weeks. The proposal is contained in the new draft methodology for forming and applying prices of oil products that was discussed in public debates on February 23, IPN reports.

NAER director Octavian Lungu said the methodology is aimed at reducing the prices of oil products for end-users. “Our expectations are that the costs will be reduced as we heard not only once that there are too many gas stations. By introducing a ceiling on prices, we will ensure normal competition between operators,” he stated.

Head of the Agency’s Tariff Policy and Economic Analysis Division Alexandru Mija, who is the author of the new methodology, said the price will no longer be set by each operator apart as there will be calculated the average costs in the sector. “The prices of oil products will consist of four main components: average value of the Platts quotations for the main oil products and of the Argus quotations; the excise duty and the value added tax put in accordance with the Tax Code of the Republic of Moldova, and the specific profit margin that should include companies’ costs and profit,” he said.

He noted that a separate section of the methodology refers to the method of calculating ad approving the specific profit margin. “The margin for this year should be calculated based on the costs incurred by companies last year and by using a cost diminution coefficient,” stated Alexandru Mija.

The specific profit margin will 70% depend on the consumer price index and 30% on the official exchange rate of the national currency against the U.S. dollar.

The participants in the debates, who included representatives of state institutions, operators from the oil market and energy expert, will submit proposals over the draft methodology within two weeks. A joint working group will be later set up to finalize the new methodology, which will be then proposed again for debates.