A significant drop in the price of oil derivatives is certain from Tuesday, and yesterday it was unofficially estimated that it could be by around 11 to 14 cents per liter of fuel in Montenegro. This is how sources close to the Association of Petroleum Derivatives Companies of Montenegro estimate, indicating that it is realistic that the price of Eurodiesel will drop by about 11 cents, and gasoline by about 12 to 14 cents per liter.
The current price of diesel is 1,16 euros per liter, Eurosuper gasoline 98 - 1,31, and 95 octane gasoline - 1,28 euros.
The Minister of Economy, Dragica Sekulić, announced that they expect a drop in the prices of oil derivatives from Tuesday and that they will give the final information about it on Monday. She stated that the drop in fuel prices could be eight or nine cents.
Oil prices have halved since the beginning of the year, and a drastic drop in international stock markets has been recorded since the coronavirus epidemic, and then the failed agreement between the Russian Federation and the OPEC countries. Due to a certain drop in the price of all types of fuel in Montenegro, transporters and producers are not thinking about price correction for now - while they see whether the lower prices of oil derivatives will remain and how the consequences of the coronavirus will affect their business.
According to the Regulation on the method of establishing the maximum retail prices of oil derivatives, in Montenegro, prices are adjusted every two weeks according to the established formula, and they depend on the average growth (or fall) of prices on the world stock exchanges and the movement, that is, the oscillation of the euro/dollar currency pair. Regional suppliers form prices against the Mediterranean Platt's Ground exchange.
The price of oil on this stock exchange between the two comparative periods fell on average from about 510,95 dollars per ton to about 415 dollars, while the euro strengthened against the dollar by almost 2,6 percent and was unaffected by the final calculations.
The owner of the BLT bus company, Božo Bulatović, is satisfied with the upcoming fuel price reduction, but says that "other costs are still high".
"It will be a much more realistic and true price of fuel, because anything over one euro (per liter) burdens us and you." The right thing would be if, after this, the price of auto parts, tires, maintenance and registration, and labor would become cheaper, but these costs are still high and burden the business," said Bulatović.
The owner of the company "Alivodić", Haris Alivodić, hopes that the drop in the price of oil on the world stock exchanges will contribute to compensating the operating costs.
Due to the coronavirus and the announcement of possible restrictive measures, Alivodić expects possible "difficult business conditions and fewer departures" of buses, as happens in the summer when schools are closed.
According to official data from the Ministry of Economy, Eurodiesel was the cheapest in recent years in 2016, when the price per liter ranged from 82 cents to one euro, while gasoline prices ranged from 1,06 to 1,17 euros per liter that year.
"If the lower prices of petroleum products remain for only 15 days, dairies will not feel a significant benefit", said Zorka Šljukić, director of the "Srna" dairy.
According to her, in order to collect raw materials for milk processing, this company drives 400 kilometers daily in both directions to different households, so in "Srna" they wish for additional lower fuel prices in the coming period.
"Since 2006, we have not changed the prices of products, while the prices of all raw materials have increased by who knows how much," pointed out Šljukić, citing the rise in electricity prices in particular.
She reminded that previously they could also count on help, that is, participation from the state when it comes to fuel oil consumption, but that is no longer the case.
Other producers from other areas, whom "Vijesti" contacted, answered similarly unofficially that they will not have room to lower prices for the time being due to the upcoming change in oil derivatives.
Such a sharp daily drop in oil prices has not been recorded since the Gulf War in 1991. The current situation on the world stock markets is most affecting the main Montenegrin supplier - Jugopetrol, majority owned by the Greek Hellenic Petroleum.
World analysts estimate that there will be a recession in the global economy, i.e. that the economic crisis was pushed by the coronavirus. The European Central Bank (ECB) warned that the coronavirus pandemic is a "big shock" for the eurozone economy and called for an ambitious and coordinated budgetary response from governments, calling on them to speed up the adoption of measures.
Businessmen propose postponement of tax payment, longer term of loan repayment...
The Employers' Union and the Chamber of Commerce survey businessmen, asking for their opinion on the impact of the crisis on their business and what they propose that these organizations initiate to the Government.
According to "Vijesti" information, businessmen from various fields state that they are already feeling the impact of the crisis, not only in tourism, but also employers in the fields of transport, industry, trade and construction.
So far, the most frequently mentioned measures are to enable them to defer taxes and other duties, to reprogram them for longer-term loans with smaller installment amounts and without new costs...
UPCG, on the occasion of timely planning and response to the expected consequences of COVID-19, requested an urgent session of the Social Council.
In addition to the social partners - members of the Council, the UPCG proposed that representatives of the Ministry of Health, Economy and Finance attend the extraordinary session.
The aim of the dialogue is, among other things, to create the necessary measures to support the sustainability of the company and the preservation of jobs.
"Aware of the topicality of the moment, the UPCG expects that the Social Council will schedule an extraordinary session with an expanded composition as soon as possible and thus enable a dialogue that will result in the adoption of measures and remove doubts about certain issues that are not regulated by current legislation, and which concern employers and their employees." , pointed out from UPCG.
Reaction of banks
Bank of Podgorica announced that from Monday to April 15, it will cancel fees for transactions for citizens via electronic and mobile banking and cash withdrawals with debit cards at ATMs of other banks. In the same period, all citizens who use e-banking and m-banking services will be able to make free transactions through these services.
They said that with this move they want to make business easier for clients due to the current situation and the need to implement measures to prevent the emergence and spread of the coronavirus.
"All users of debit cards (Visa debit, Mastercard debit or Mastercard gold debit) issued by the bank will be able to withdraw money free of charge at ATMs of all banks in Montenegro. Withdrawing money with these cards at our bank's ATMs is free," the bank said.
NLB Bank posted business tips on its website for clients, saying that they use advanced channels and digital services.
"When visiting the branch, avoid crowds, pay attention to the distance when staying indoors and use disinfectants", are some of the recommendations. The Central Bank has publicly suggested to banks that they monitor the operations of their clients and, in case they run into problems caused by the coronavirus pandemic, help them by aligning the repayment terms of existing obligations and new loans with their capabilities. Formal measures are pending.
There are no significant price fluctuations on the stock market
In Montenegro, there was no reaction of the company's stock owners to the news about the coronavirus, in contrast to the movement on the global and regional stock exchanges, where investors increased the offer of shares, caused a drop in stock prices, which ultimately brought down the stock market indexes and caused a short-term stoppage of trading on certain stock exchanges in the world.
This was announced to "Vijesta" by the director of the Montenegro Stock Exchange, Milena Vučinić.
She said that individual investors do not react like others in the environment, but on the contrary - "these days we have intensive trading in the shares of the hotel company Budvanska Riviera, "Sveti Stefan hotela..."
"The daily turnover is unusually high, the first two and a half months of 2020 are promising... There was no increased sale of shares in the tourism sector, that is, shares of Montenegrin hotels and the sector dealing with travel and tourism. Stock market turnover is normal, indices do not record significant changes. "Professional and individual investors in the world have shown caution and fear of economic uncertainty, which the next period will bring, and the impact of the coronavirus on future global and local economic trends," Vučinić said.
He adds that there are no significant fluctuations in price movements when trading shares of tourism companies:
"It seems that none of the shareholders and institutional investors in Montenegro shows any doubt that visits to Montenegrin hotels and restaurants will be weaker this year, which may result in a drop in income, which will directly affect the final business result of companies from the tourism sector, as well as on the price of shares on the stock exchange," explained Vučinić.
She pointed out that the first quarter is ending, and the consequences of the virus will be transmitted to the second quarter.
"This is a sufficient signal that we should have moderate economic expectations, that is, a slowdown of the economy is certain, which can be a prelude to a global recession. The economic sectors that will be most affected by the coronavirus are travel, vacations, air transport, the oil industry, car production, Vučinić said.
The net profit of the Montenegro Stock Exchange in 2019 was 225.948 euros and was significantly higher than in 2018, when it amounted to 88.658 euros.
The business income of the stock exchange, comparing the two periods, increased from 380,9 thousand to 491,7 euros, while expenses decreased from 223,53 thousand to 191,58 thousand euros. The effects of the virus will carry over into the second quarter. This is a sufficient signal that we should have moderate economic expectations, that is, a slowdown of the economy is certain, which can be a prelude to a global recession, said the director of the Montenegro Stock Exchange.
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