CEE NOIA’s meeting Bratislava, 20 April 2015

Gasoline - 1 January 2014 – 4.5 % in volume - 1 January 2018 – 8% in volume - 1 January 2019 – maxim oxygen content 2.7% and maxim 5% ethanol in volume Oil -1 January 2014 – minimum 5% in volume -1 January 2016 – minimum 6.5 % in volume  Exception – oil for severe climate ( hard winters)  Targets can be reduced to half if biofuel is obtained from used oil, waste, residues or any non food origin material Biofuels

Limitations - no fiscal incentives - no second generation available in the country - old car fleet Biofuels are blended either in the refinery or in depots Obligations - to post the biofuel component at the pump. - to post E10 for gasoline with an ethanol content more then 5 % in volume or 2.7 % oxygen content - penalties are up to 4500 euros

Biofuels Future We do not encourage higher blends as: -there is no real demand from the car manufacturing industry for increased bio blends -filling station infrastructure: the number of tanks restricts number of types of fuel - bio blends are exclusively a legislative requirement, not a demand from the market We estimate it would be a long term process that involves concerted action by auto manufacturers, oil industry, authorities and transporters associations to align new fuel developments and engine technology

Emergency Oil Stocks The Romanian Law is just a translation of Directive 2009/119/CE -Obligation for emergency stocks on operators that are introducing on the market more the 1000 tones petrol/fuels per year -Before 2014 the emergency stocks were held by a state agency. Starting with 2014 all the burden of the emergency stocks were transferred to operators -The quantities were calculated by the Ministry of Energy and were released to the companies as state secret -Penalties are calculated as a percentage from the turn over -No Central Stock Entity to date

Emergency Oil Stocks Delegation procedures were in place in December maximum 13% from the obligation -with the approval of the state authority ( Ministry of Energy) -on a period of minimum 4 months and maximum of an year -the emergency stocks can not be the subject of a real guaranty or forced execution - the procedures require different documentation for internal /external delegation

Grey zone  Romania does not have a dimension of the grey zone but the Government declares that is very high  Antifraud Department - the grey zone is mostly in the engross commerce without storage - comes from blending different oil types /lubricants with fuel - it is done by a chain of ghost companies - proposed legislation that will restrict the engross commerce to operators that have storage facilities - the “invention” of a new monthly declaration  Currently the authorization for engross commerce is easier to obtain then the others

Grey zone We recognize that his is both state and oil industry issue for tax and for unfair competition ARP is currently participating to a Working Group with Antifraud Department ARP proposed that the authorization for engross commerce without storage to be - conditioned by a guarantee - conditioned by documentation ( to eliminate the ghost companies)

Other country issues Service stations security - imposes the use of protection foil on all service station windows - secured counter overnight if less then 3 workers in service stations Both measures are illogical and highly expensive mostly for not adding value to the security level Currently working with Government to change the law

Other country issues

Thank you! Bratislava, 20 April 2015