Tuesday, December 10, 2013

Romania delays diesel price hike amid resistance

BUCHAREST, Romania (AP) — Romania's prime minister said Monday he will delay a proposed diesel fuel tax increase that the president has opposed, but go ahead with one on gasoline.

Victor Ponta said he would delay his plan to raise diesel prices for three months, but that he will go ahead with a proposed tax that would raise gas prices by seven euro cents (10 U.S cents) per liter (0.26 gallons).

President Traian Basescu last week said fuel increases would "harm Romania's interests and economic recovery," hitting vulnerable retirees especially hard.

Given the large majority that Ponta's party has in Romania's parliament, it is expected to quickly pass the new gas tax. But Basescu said if that happens he will not sign a memorandum for a standby loan with the International Monetary Fund and will reject next year's budget.

The two leaders are bitter political rivals. Basescu last week accused Ponta of being "deeply corrupt" and of using legislation to unfairly benefit his governing Social Democracy Party.

The government has promised the IMF it will rein in spending and keep its budget deficit down. An IMF mission is due to visit Romania in January.

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