New Prime Minister, Same Fuel Crisis

At the outset of the new prime minister’s tenure, the authorities once again face the dilemma of how to reduce public support measures amid an unfavorable energy market environment

A sense of déjà vu – this is precisely the feeling prevailing among citizens over the past week amid rapidly rising energy prices. Diesel fuel has broken through the psychological threshold of 31 lei, while petrol is now selling above 30 lei. The situation is unfolding almost exactly as before: once again, at the peak of the agricultural season, this time during the harvesting campaign. Many petrol stations are again facing fuel shortages, while imports are being hampered by logistical and pricing challenges. Bringing fuel into Moldova is simply becoming unprofitable. Diesel fuel barges are being bought up by intermediaries while still in transit, changing course toward wealthier clients. The functioning of the entire transport sector has come under threat. As in the spring, the problem of water supply has also intensified, although this time not because of pollution of the Dniester waters. All of this is taking place amid a government reset and the appointment of a new person responsible for handling the situation – the prime minister, who came to office with a pledge to cut budget expenditures and reduce the state’s social obligations toward citizens. Unlike his predecessor, Vasile Tofan has not yet faced an emergency in the electricity sector that could have pushed the country toward a blackout. However, instead, he is now confronted with the gas issue in full force. A steady increase in gas prices has forced state institutions to revise the tariff, “pleasing” consumers with a 45% price hike at once. All these difficulties are piling up on top of one another, creating a serious challenge for the ruling authorities. The population, civil society, and the media are raising increasingly more questions about the effectiveness of public administration, expressing clear dissatisfaction with the constant explanations referring to an “unfavorable international environment” and the lack of effective solutions to mitigate the consequences. Undoubtedly, geopolitical instability is an important factor behind the constant crises. The period of relative stability and predictability for countries and businesses, both globally and in the Black Sea region, has come to an end. Under the current circumstances, state leaders are required to make extraordinary efforts merely to keep their countries afloat, let alone achieve any kind of growth. The current surge in prices is linked to disruptions in maritime shipping through the Strait of Hormuz, which have pushed global petroleum product prices higher. A quick resolution and a return to the previous status quo in the Middle East should not be expected. The situation is similar in relations between Russia and Ukraine. Operational risks for energy supplies to European and global markets from Russia, including transit routes, have been steadily increasing over the past two decades. In 2006, these risks were associated with disputes over pricing and unauthorized gas withdrawals. In 2022, they took the form of sabotage attacks on gas pipelines. In 2026, the conflict has entered a new phase of escalation: not only the destruction of Russian energy infrastructure, but also strikes against international projects located within Russia’s area of responsibility. Attacks on the offshore facilities of the Caspian Pipeline Consortium (CPC) marked a new level of confrontation, where collateral damage to allies is no longer a restraining factor in escalation but, on the contrary, is viewed as an important element of strategy. As in the case of the deliberate destruction of gas transportation infrastructure linking Russia, Ukraine, and Europe, the campaign against oil infrastructure is aimed at redirecting consumers of Russian and Kazakh oil toward alternative sources, while also using emerging vulnerabilities to increase dependence among regional elites. The example of Moldova and Romania has demonstrated how the cessation of Russian gas supplies was subsequently followed by clear political transformations. The regional implications of these developments are clear. A significant share of petroleum products imported into Moldova comes from the Petromidia refinery operated by Rompetrol, part of KMG International. In the first half of 2026, the company reported a net profit of $87 million. The volume of crude oil processing and petroleum product output increased to 2.5 million tons. Sales growth was driven primarily by the expansion of wholesale supplies to Romania and Moldova, which accounted for more than one-third of gasoline and diesel fuel consumption in the neighboring country and more than 50% of consumption in Moldova. However, strikes targeting oil supply logistics through the Black Sea have led to a significant decline in the refinery’s output. As a result, the market is facing a substantial shortage of petroleum products. This should also be viewed in the context of the situation surrounding the Petrotel-Lukoil refinery, which previously covered around 20% of domestic consumption. Despite certain efforts by Bucharest, the facility has still not resumed operations. The letter from the US Treasury Department dated 14 April, presented by the government of Ilie Bolojan as an achievement, only concerns technical maintenance and the winding down of production activities. A restart requires an OFAC license, similar to the one granted to Bulgaria for its Lukoil refinery. Bucharest failed to secure a comparable exemption and has now faced an additional blow with the problems affecting Petromidia. It is noteworthy that signals about Romania’s vulnerability in the energy sector had already emerged earlier, including in the form of a Ukrainian naval drone that was reportedly “lost control of” and subsequently detonated. This was followed by drone strikes directly targeting tankers and the infrastructure of the Caspian Pipeline Consortium (CPC) in Novorossiysk. Observers find it difficult to imagine that the authorities of Romania and Moldova would publicly protest against actions by Ukraine that may be linked not only to Kyiv’s own interests. Military instruments are becoming increasingly sought after as a means of achieving objectives that go far beyond the framework of the Russian-Ukrainian conflict. The geography of their use and the range of actors with vested interests are considerably broader. What can the government and Prime Minister Tofan personally do under these circumstances? Following the spring fuel crisis, only one strategic decision was adopted: the creation of petroleum product reserves. However, even this measure had to be postponed for a month because it was supposed to be financed by consumers themselves. Adding an additional charge of 48 bani per liter of fuel to current prices would immediately aggravate the situation, especially at a time when no one is even discussing a reduction in VAT or excise duties. This unpopular measure will have to be delayed for a while, but consumers are being made to understand that all further measures to “stabilize” the situation in the energy sector will be implemented solely at their expense. As a measure to support importers, the Cabinet is not even considering a temporary reduction in VAT or excise duties, as is being done in other European countries. Instead, the importer margin within the diesel fuel tariff structure is being increased by $25 per ton (+37 bani per liter), although even this does not satisfy fuel suppliers. Plans to increase the tax burden, including raising VAT on natural gas to the standard rate of 20%, have not been abandoned. The proposals currently being discussed to reduce gas tariffs and petroleum product prices by cutting transportation and distribution margins, as well as other administrative surcharges, reveal disagreements even among government officials. Each institution, whether Energocom, ANRE, or the Ministry of Energy, directly responsible for energy policy and receiving million-lei salaries, shifts responsibility onto one another or even onto the operational staff of gas distribution networks. In the latter case, PAS officials also see this as a tool for addressing corporate interests, even if it leads to the further degradation of the country’s energy sector.