The Romanian government has officially announced that it will not extend the price cap on basic food products from October 1, local media reported. The decision immediately caused tension within the ruling coalition. According to spokeswoman Ioana Dogioiu, the measure was approved “without any objections“ by the coalition partners, bTV reported.
“The decision not to extend the cap on trade markups on basic food products was taken by the ruling coalition. The coalition decided, without any opposition, that the extension of three months ago would be the last, as it causes economic distortions for both producers and retailers," said Dogioiu.
The interim leader of the PSD, Sorin Grindeanu, reacted immediately and opposed the official version, claiming that this decision had not been discussed in the coalition. Grindeanu declared himself "concerned" about the removal of this protection mechanism and announced that he would "urgently request clarifications from the governing partners."
"This is a decision that we have not discussed in the coalition and that the PSD cannot agree with," Grindeanu wrote on Facebook. The Social Democrats leader warns that "removing the ceiling would immediately increase inflation by another 2-3 percentage points," which would affect Romanians' purchasing power.
The lifting of price restrictions comes in a difficult economic context, with inflation already reaching 9.9% in August - the highest level in two years. Experts warn that the removal of the measure could increase pressure on the prices of basic food products.
The list of products that will be affected includes 17 categories of basic foods: bread, milk, cheese, yogurt, flour, cornmeal, eggs, sunflower oil, chicken and pork, fresh vegetables and fruits, potatoes, sugar, sour cream, butter and plum jam.
The cap on trade markups was initially introduced in August 2023, in the face of rising inflation, and has been extended multiple times. The measure limited the markup to a maximum of 20% for manufacturers and 5% for distributors and retailers.
Prime Minister Ilie Boloyan has scheduled a meeting with representatives of retailers next week “to ensure that not extending the price ceiling will not lead to significant price increases“, according to a government spokeswoman.