Moldova's National Energy Regulatory Agency explains impact of situation in Middle East on fuel market

Moldova has sufficient stocks of oil products and citizens are urged not to make panic purchases. At the same time, petroleum products are imported into the country on a daily basis and the National Energy Regulatory Agency (ANRE) continuously monitors the market situation, to ensure consumers’ protection. ANRE Director Alexei Taran today made statements to this effect; he explained the impact of the tense situation in the Middle East on the fuel market of Moldova.

According to the ANRE director, the crisis in the Middle East has disrupted all supply chains at the global level, and Moldova is directly affected by international developments, given that it is dependent on imports of oil products.

“Global supply chains have been affected, which has automatically triggered movements on stock exchanges and markets. Moldova does not produce or extract crude oil with small exceptions. What is extracted in Moldova is not enough to fully cover the country’s consumption, so, practically, we can say that Moldova is entirely dependent on imported oil products. Thus, we are exposed to all international price fluctuations. Everything that happens internationally affects us too,” said Alexei Taran.

At the same time, the official stressed that the price-setting mechanism for oil products applied by ANRE is transparent, clear and public, and includes more components, including the 14-day average of Platts quotations, the official average exchange rate of the national currency against the dollar, the specific commercial margin the excise rate and the VAT rate.

Thus, with the start of hostilities in the Middle East, Platts quotations rose sharply.

“This increase has affected the entire globe, not only Moldova; it has hit the entire region, since Platts quotations are reference quotations for transactions,” Taran said.

The ANRE head acknowledged that the situation could stabilize, depending on developments in the Middle East.

“There was a shock wave, there were subsequent shocks and now a correction is underway. What we need to understand about stock exchanges is that their first reactions to geopolitical events are always a shock. Afterwards, as new information comes in, the evolution corrects and stabilizes. We are already seeing stabilization. Depending on decisions that will affect the situation in the Middle East, it is possible, in the short term, for this upward trend to stop and for there to be a downward correction. This means that the average quotations we use will automatically absorb all these shocks and will go slightly down, if there is a downward trend,” said Alexei Taran.

The ANRE director emphasized that the mechanism used by the Agency protects all consumers from market volatility shocks.

Alexei Taran further stressed that there are sufficient stocks of petroleum products in storage.

“The storage facilities have around seven days of stock, seven days of diesel consumption, and at Giurgiulesti, there are also around five days of stock, which means that storage alone ensures 12–13 days of stock, depending on consumption. At the same time, I want to mention that there is also diesel fuel available in all filling stations across the country for almost 10 days. In the end, we have 18–20 days of stock, which is sufficient for Moldova’s consumption,” said Alexei Taran.

In addition, the official noted that oil products were imported to Moldova every day and urged citizens not to make panic purchases of fuel.

A state of alert has been declared in the energy sector at the national level in Moldova, for a period of 60 days starting from March 4. The decision was approved today by the government. Prime Minister Alexandru Munteanu said that it was a preventive measure, aimed at protecting the country’s energy security.