Fuel dealers engaged in waiting game

The operators on the car fuel distribution segment are staying on the market because it is very attractive in the long run, and less because of the current profit margin. “The trade margin on the distribution segment is very low and changing on a daily basis. Whereas the margin amounted to $18 per cubic metre (of fuel i.e.) in 1992, and then moved up to $70 per cubic metre over the years, today it is not going anywhere above $30 per cubic metre,” says John Long, general manager of Rompetrol Downstream, Rompetrol Group’s distribution division. For instance, the $30 per cubic metre margin in the case of gasoline translates into some 850 ROL/litre. “This margin forced companies such as Shell or Agip to stop investments over the last few years because they realised they cannot possibly recover the money invested. Why do you think giants like Chevron or Texaco stay away from Romania?” Long says. John Long feels the margin is up to the fiscal policy of the Government but also to Petrom’s privatisation. Some 70% of the gas price in Romania account for the taxes and duties to the State budget. ZF