Romanians are about to be hit by a series of price hikes, as new excise taxes on gasoline and cigarettes become effective this week on April 1.

The new fuel tax is set at seven cents a litre, meaning a price increase of 0.41 lei (0.09 euro) per litre of fuel, according to estimates.

Adoption of the increases was important in talks with the IMF, which set it as a condition for granting a 2-billion-euro precautionary loan.

While the government says the tax hike will bring in an extra 2.5 billion lei (554 million euro) for the budget, analysts say the taxes will also push up inflation and lower consumption. Many small and medium-sized companies may have to cease trading, they warn.

Romanians will also pay more for cigarettes starting this month, with an expected increase of 0.3 – 0.5 lei per pack as a result of the higher excise tax.

Price increases for natural gas are also scheduled after 1 April: 2 per cent on households, and 5 per cent for the industrial sector.

The only good news is that the government has backed off from plans also to increase the price of electrical energy.