How will the crisis in Ukraine affect our country?

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The prices of oil derivatives on the world market have been rising for some time, and the current Ukrainian crisis may further increase them. Serbia is not an island, so price increases are inevitable here as well, experts claim.

If sanctions are imposed on Russia, which would disrupt its exports, the price of oil could gain additional acceleration, believes Tomislav Mićović, Secretary General of the Association of Oil Companies of Serbia.

The Decree on limiting the prices of petroleum products Euro-diesel and Euro-premium BMB 95 is currently in force, whose prices at gas stations are currently frozen at 179 and 171 dinars per liter, respectively. Experts agree that the price increase will follow immediately after the repeal of that decree, and the Ukrainian crisis will affect the price of all other oil derivatives at gas stations, whose prices are currently not under state control.

As Bogdan Petrović, economic analyst, and Tomislav Mićović, Secretary General of the Association of Oil Companies of Serbia, pointed out for “Nova”, it is certain that oil will become more expensive on the world market, and Serbia will feel that as well.

As Petrovic points out, oil derivatives have already become more expensive, so further growth of their prices, due to the crisis in Ukraine, is inevitable.

“Fuel will certainly become more expensive, the only question is where this will stop,” Petrovic explained briefly.

As he points out, no one can yet say with certainty how long the price increase will continue and what the consequences will be, but the only thing that is certain is that the price increase.

As Tomislav Mićović points out, the movements on the global market from the beginning of the year indicated that the prices of BRENT will reach 100 dollars per barrel by spring, which happened literally overnight.

“Even before Russia’s intervention, it was clear in Ukraine that it would not be easy to balance supply and demand. Market appetites are growing rapidly, more precisely the appetites of oil traders, which is raising demand day by day, while some OPEC countries plus alliances, they cannot fulfill the quotas that have been allocated to them, while other countries do not want to take over their obligations “, explains Mićović.

According to him, now the oil deficit that raises the price has been further deepened, and if sanctions are imposed on Russia, which would in any way disrupt its exports, the price of oil could gain additional acceleration.

It should certainly not be forgotten that, after Saudi Arabia, Russia is the second largest oil exporter in the world and that the share of Russian oil processed in the refineries of the European Union is 25%.

“Serbia will, as before, share the fate of all countries that are net importers of oil,” Micovic said, explaining that freezing retail prices with rising crude oil prices could quickly mitigate the blow to the market, but that can only be a short-term measure. because it is unsustainable in the long run to expect the entire oil sector to take on all the burden, including the negative difference between the purchase and sale price.

According to our interlocutor, many countries in Europe have realized that they cannot maintain the same policy of excise taxation of energy as before.

“In Serbia, the share of fiscal duties in these limited gasoline and diesel prices is 51-52 percent. If the state wants to mitigate the impact of high fuel prices on the economy and society as a whole in the long run, it should reconsider the impact of high energy prices and administrative maintenance their prices and after that to harmonize the policy of excise taxation of all energy sources with the results of that analysis “, Mićović explained at the end.

We should not forget that Serbia is dependent on Russia when it comes to the supply and price of gas, reminds energy expert Miodrag Kapor.

“We reached an agreement with Putin on a favorable gas price. We reached an agreement in November and it is valid for six months – what will happen after that depends on Putin. It is all a political decision if the regime in Serbia, specifically Vucic, satisfies Russia’s demands. “Federation, then we can hope for a similar and favorable arrangement. If that is not the case, then the price will rise,” Kapor said.

When it comes to the gas supply itself and the danger of someone “turning off the tap”, Kapor is more optimistic and is not afraid of shortages.

“We are currently getting gas through the Balkan or Turkish flow. Even if the supply through Ukraine is completely cut off, we have an alternative. We are relatively safe from that side,” Kapor explains.

How to stabilize the price of fuel

Before the decree on freezing the price of fuel, they reached 185 dinars per liter, and economists agree that freezing prices is an outdated method, and that reducing excise taxes is the only correct way for the state to regulate this problem of high prices and thus make it a little easier for drivers. in Serbia. The conflicts in Ukraine certainly do not help Serbian drivers, our interlocutors conclude, Nova writes.