Fuel prices in Montenegro will be at a new record level from tonight at midnight, on the wave of rising prices of oil and oil derivatives on world markets.
Given that the price of a barrel of oil in New York and London dropped rapidly in recent days due to the catastrophic earthquakes in Japan, in 15 days the prices in Montenegro should also fall.
Reuters reports that oil prices on international markets have fallen to their lowest levels in two weeks, as a series of catastrophic earthquakes and tsunamis in Japan have seriously shaken investor confidence.
The Japanese factor
Crude oil on the London market fell by more than two dollars per barrel to $111,64, the lowest level since February 25.
A barrel on the New York Stock Exchange also fell over two dollars and cost 99 dollars yesterday.
Market analysts expect oil demand from Japan, the world's second largest energy consumer, to fall in the short to medium term, as the country's economic activity is likely to be curtailed following the earthquake and tsunami.
This drop in prices on foreign markets will be reflected on the Montenegrin market only in two weeks, when the next adjustment will take place. Until then, drivers will pay for fuel at record prices. The biggest impact will be felt by drivers of vehicles that use Eurodiesel, because that type of fuel has gone up by five cents and as of today costs 1,30 euros per liter. The prices of unleaded fuels BMB95 and BMB98 are two and three cents higher, and will be poured for 1,34 and 1,37 euros per liter, respectively. Those prices will be valid until the next adjustment, that is, until March 28.
State duties are not negligible
New fuel prices are formed on the basis of requests that Jugopetrol proposes to the Ministry of Economy every other Monday, based on the fluctuation of oil prices on the world oil market and the exchange rate of the US dollar and the euro.
Price management is managed by a special sector in the Ministry of Economy, based on the regulation on the method of establishing the maximum retail prices of oil derivatives.
Apart from the prices on the world market and the exchange rate between the dollar and the euro, which objectively Montenegro cannot influence, the level of retail prices is also affected by state duties, which are not so negligible.
When it comes to unleaded gasoline of 95 octane, excise duty and value added tax (VAT) make up more than 50 percent of the retail price, and in the case of Eurodiesel, that percentage is 47 percent.
Better for the budget, pressure on the economy
Although the reduction of these duties would greatly facilitate the lives of citizens, but also relieve the prices of a number of agricultural products for which fuel is a significant input, the Ministry of Finance is not thinking about it.
Higher fuel prices create greater benefits for the state coffers, but, on the other hand, they represent pressure on the economy, which may or may not be reflected in the growth of retail prices of a number of other products and services, starting with transportation, food products, and the like .
Estimates are that on the basis of excise duty and value added tax (VAT) on fuel, citizens will add more than 10 million euros to the state coffers by the end of the year, depending on further price trends on the domestic and foreign markets.
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