site.btaFuel Prices in the Balkans: Governments’ Response

Faced with the spike in fuel prices, Balkan governments responded with a variety of steps to cushion the shock for consumers and reduce the impact on the prices of practically all other goods. Following is a breakdown by country:  

Romania

The government introduced a RON 0.50 [RON 5.00 = EUR 1.00]/l compensation directly at gas stations to be marked directly on the fiscal receipt, valid for three months as of July 1. The compensation is worth RON 2.0 billion, half of which co-funded from the state budget, Prime Minister Nicolae Ciuca said. An analysis to judge whether new measures are needed will be made at the end of the period.

Fuel prices in Romania exceeded RON 8.0/l in the beginning of March, compared to the average RON 6.59 at the beginning of the year. In May, the average price per litre petrol reached RON 8.3, and that of diesel – RON 8.86, a 7.2% rise for petrol and a 2.8% rise for diesel compared to the previous month.

Currently, the lowest price of standard petrol in Bucharest is RON 8.56, the highest – RON 8.77; diesel sells between RON 9.16 and RON 9.30.

Greece

On June 21, Prime Minister Kyriakos Mitsotakis announced increased financial support for users. Dubbed Fuel Pass 2, it extends the existing one for the past quarter from July to September and increases subsidies for vehicle owners to EUR 80 (from EUR 45) per four-wheel vehicle and EUR 60 (from EUR 35) per motor. Subsidies for the islands will be EUR 100 (EUR 55) per motor vehicle and EUR 70 (from EUR 40) per motor respectively because of the traditionally higher transport costs.

Under the new measures, diesel will be subsidized with EUR 0.12/l. Farmers will enjoy special concessions, entitling them to reimbursement of fuels purchased in the first six months of the year even in August.

Unleaded 95 sells at an average EUR 2.40/l, compared to EUR 2.70 in the islands. Diesel, which is cheaper than petrol in Greece, has a price tag of EUR 2.10/l or EUR 2.30 on the islands.

Kosovo

Last week, the government of Kosovo approved an administrative instruction to set a maximum allowable fuel price following an identified discrepancy in domestic prices compared to price movements on the world market – a litre of petrol currently costs the record EUR 1.90 for the country, jumping nearly EUR 0.15 in just a week. The Kosovo Agency of Statistics reported a 12.5% May inflation year-on year. Fuel prices in 2022 have risen by 45.3% compared to the same month a year previously.

Serbia

From June 24 to 30 the price of euro-diesel in Serbia is RSD 212 (EUR 1.8)/, and that of petrol Euro Premium BMB 95 – RSD 201 (EUR 1.71)/l, the Ministry of Trade, Tourism and Telecommunications announced. 

In comparison, at the beginning of the month, prices were set at RSD 206 (EUR 1.75) for Euro-diesel and RSF 193 (EUR 1.64) for BMB 95 petrol. 

Following the Russian invasion in Ukraine and the spike of oil prices in the world market, the government adopted an ordinance on March 10 to reign price growth for Euro-diesel and Euro Premium for a month in order to avoid disruptions on the market and preserve the standard of living. The ordinance term has been extended twice since then, the last being valid until June 30.

The ordinance also provides for the way the maximum price of the two fuels at stations is calculated: by adding RSD 7.0 (EUR 0.06) to the respective fuel average wholesale price.

In end-April, the government reduced the excise duty for diesel and petrol by 15% compared to pre-March 10 levels, which had already been reduced by 20%.

Slovenia

Ordinary petrol and diesel at stations beyond motorways rose at the beginning of last week by nearly EUR 0.20, media reported. Ordinary petrol costs EUR 1.75 compared to EUR 1.56 previously, and diesel is EUR 1.848/l compared to EUR 1.668/l. The new prices will remain in force until July 4, when they will be corrected again.

Fuel prices were last restricted on May 11 by the previous government after the spike in energy prices. The new incumbents decided to introduce again, again for one year, a system to regulate price margins at off-highway gas stations, while completely exempting fuel prices at on-highway stations. The government also set a maximum fuel margin and temporarily removed several environmental taxes on fuel.

Croatia

Last week, the Croatian government decided to freeze fuel prices for two weeks, starting on Tuesday, at the current levels at all petrol stations except on motorways. The decision concerns 94% of the filling stations in the country and does not cover premium fuels.

Thus, diesel now costs HRK 13.08 (EUR 1.73)/l and petrol 95 – HRK 13.5 (EUR 1.79)/l if bought at off-motorway stations. On motorways, the prices may grow, diesel now being HRK 13.57 (EUR 1.80) and petrol 95 – HRK 14.06 (EUR 1.86).

Earlier this month, the authorities further reduced the excise tax and margins on fuel sales to mitigate the effects of the rise in global oil prices.

In March, the government reduced excise duty on petrol by HRK 0.40 (EUR 0.053) and by another HRK 0.40 this month to the total of HRK 0.80. For diesel, excise duty was reduced by a total of HRK 0.40.

Republic of North Macedonia

As of June 28 fuel prices in North Macedonia dropped by an average 0.82% according to a June 23 Decision of the Energy and Water Regulatory Commission, and the exchange rate of the denar against the dollar over the past period, after which prices were formed with the previous calculation, is by 0.35% lower.

As of June 28, petrol EUROSUPER BS 95 sells at MKD 109 (EUR 1.77)/l, EUROSUPER BS 98 – MKD 111.50 (EUR 1.81), while diesel will sell at MKD 109 (EUR 1.77).

Fuel prices change quite frequently, to avoid a major price shock. The government adopted a package of 26 measures to cushion economic crisis consequences, divided into two categories: the people and business.

Turkey

There has been a near quadrupling of fuel prices in Turkey over the past year, leading to calls for excise tax cuts, but so far the government does not seem to envisage such measures, judging by the budget update tabled in parliament, the Sozcu daily reported.

In the 2022 Budget adopted at the end of last year, the state had projected revenues of TRY 31.5 billion (about EUR 1.8 billion) from excise taxes on oil and natural gas, and as a result of the surge in petrol, diesel and gas prices, it collected TRY 28.3 billion (EUR 1.61 billion) in the first five months alone. In the budget update, revenues from fuel excise duties are projected to rise by a further TRY 47.2 billion (EUR 2.7 billion) above the TRY 31.5 billion originally envisaged, the newspaper said, adding that this means that the government not only does not foresee a reduction in excise duties, but also plans to increase revenues to the treasury by taking advantage of the price hike.

In Istanbul, petrol costs TRY 27.5 (EUR 1.58), some TRY 2.5 (EUR 0.14) of which are for excise duty and TRY 4.0 (EUR 0.23) – for VAT. A litre of diesel costs TRY 29.9 (EUR 1.71), including TRY 2.06 (EUR 0.12) excise duty and TRY 4.3 (EUR 0.25) - VAT.