Els, the Order of Merit (European Tour money list) leader, mixed three birdies, five bogeys and a par over his back nine to go along with five birdies on the front for a 3-under 68.
Robert Karlsson, the wire-to-wire winner in 2002, carded an even-par 71 on Saturday to finish in third place at 10-under-par 203.
Romero flew out of the gate with an eagle at the first hole at the Alpine Course at Golf Club Crans-sur-Sierre. He sank a five-foot birdie putt at the fifth and birdied the par-3 eighth to stay atop the leaderboard with Els and Karlsson.
When the trio made the turn, things changed quickly. Karlsson found trouble twice with the same tree and made double-bogey at the 10th to fall behind the leaders but neither Romero nor Els were immune to mistakes.
Els landed on the fringe at the par-3 11th and left his birdie try five feet short. He missed the par save then bogeyed 12 when his 12-footer for par missed left.
Romero, in the trio behind Els, missed the putting surface short at the 12th and his chip hit a ridge in the green and rolled back to the fringe. Romero two-putted for bogey and Karlsson made bogey at the same hole.
Els' poor run continued at the 13th when his bunker shot rolled 25 feet from the hole. He missed that par putt then found water at 14 and made his fourth bogey in a row.
Meanwhile, Romero was able to right the ship. He sank a four-foot birdie putt at the 14th to go to 12-under par and move two clear of Karlsson. Els birdied No. 15 to get back into it but Romero followed him with a two-putt birdie from 20 feet at the par-5 hole.
Els dropped another shot to fall four back but rebounded to take second place. At the 17th, Els hit his approach less than a foot from the cup for the tap-in birdie and made another birdie at 18 from five feet to get within two of Romero.
'For awhile there I played almost flawless golf,' said Els, ranked second in the world. 'The back nine got me when I missed a couple of shots and couldn't get up and down.'
Romero and Karlsson both parred out to give Romero his first 54-hole lead since last year's Dunhill Links Championship, which he lost in a playoff to Padraig Harrington.
If Romero, a two-time winner of the European Masters, can hold on Sunday to visit the winner's circle, he will become the oldest champion in European Tour history. Romero, who would be 49 years and 52 days, would best Des Smyth's previous mark of 48 years and 34 days when he titled at the 2001 Madeira Island Open.
'I don't feel old,' said Romero. 'In my mind I am not 49 years old. I am very strong and hitting the ball 10 or 15 yards further than I did before. This year in particular I feel very strong.'
Karlsson held the lead in this event after the previous six rounds but he is still in position to become the first back-to-back winner of this championship since Seve Ballesteros successfully defended his title in 1977-78.
'As I said yesterday, I don't mind losing my lead today as long as I reclaim it tomorrow,' said Karlsson. 'It will be great to play in the final threeball with Eduardo and Ernie.'
Brian Davis (68), David Howell (67) and Raphael Jacquelin (68) share fourth place at 9-under-par 204, followed by Emanuele Canonica (67), Paul Casey (67) and Marc Farry (66), who are tied for seventh place at minus-8.