Vasile Iuga, senior partner with PwC Romania, said the government’s plans to increase the level of royalties levied on hydrocarbon production to European rates could lead to fewer investments in the sector.
“We don’t think that reaching the European average rates would be relevant,” Iuga said during a presentation of the Romanian tax and royalties system in the oil and gas sector.
Romania has implemented a set of fixed royalty fees for oil and gas companies ranging between 3.5% and 13% of the production value. The authorities have repeatedly announced plans to increase royalty rates to EU average levels as early as 2014.
The eastern European country collects around 1 billion lei (EUR228 million) in gas and oil royalties annually.