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Oil price is based on free estimate, not market

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According to data from July 31st, drivers in Serbia pay the most expensive diesel and gasoline compared to the countries of the region, and energy expert Miodrag Kapor says that the price of oil derivatives in Serbia is unfortunately not formed on the basis of the market, but on some free estimates.

Kapor for N1 explains that the price is determined on the basis of the decision of the Ministry of Mining and Energy, that decision is also influenced by the Ministry of Finance, and this has been the case since February 2022.

“I see no reason for the market not to decide on the price.” “The prices on the world market have stabilized, they are at a relatively low level compared to the period of several years ago, and I do not see that they will be excessively higher in the coming period,” he said.

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As he stated, there are many factors that affect the prices of derivatives.

“We are a closed country, we don’t have access to the Mediterranean, so transport costs are higher than in other countries,” he said, citing as an example Bulgaria and Romania, which have access to the Black Sea, so derivatives are significantly cheaper.

In Serbia, there is a “corrective factor” that no one knows about except in the relevant ministry.
“They determine what the corrective factor will be of their own free will. Excise duties and tax policy are at a significantly higher level in our country compared to other countries, and this is a significant income for the budget of Serbia,” said Kapor. He says he doesn’t see any reason why the state would interfere in determining the price of oil.

“The problem is that we have a dominant player on the market, which is the result of handing Nis Naftagas over to the Kremlin.” We have very high-quality Velebit oil produced in our country, which would cover about 20 percent of our domestic needs. “Prices are not corrected even though we have some significant changes on the global, local, regional market,” he said.

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As he stated, until a few months ago, Serbia was able to import Russian oil, which was and still is significantly cheaper than others, so the price was similar.

“So someone was taking profit at the expense of citizens, the price is not formed on the basis of the market, but on the basis of some free assessment, and the ministry should be asked why that is,” he emphasizes.

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