In three to four months, a new fee of one or two cents for so-called fuel marking will be added to the retail price of fuel, after a fee of three cents per liter for creating oil reserves was already included a month ago.
This stems from amendments to the Energy Law, adopted by the Government yesterday, which added an entire chapter of 14 articles without public debate. The amendments state that the cost of fuel marking is paid by importers, but that it constitutes justified costs that are later reimbursed through the retail price of fuel.
If the Parliament adopts the draft law and these amendments, the Government should select a laboratory that would perform the marking and collect the costs from the importers. The marking itself would begin within 90 days of signing the contract with the laboratory, once the technical conditions are met. The marking costs, as stated in the amendments, will be determined by the Government by its decision per liter and will be paid in advance by the importers when they announce the import of that quantity of fuel.
The marking itself involves inserting nano particles (very fine powder) into fuel tanks or tankers during fuel import, so that gas stations can later monitor whether legally imported fuel on which excise duties and VAT have been paid is being sold.
Fuel marking has been announced for four years, with the explanation that it would prevent fuel smuggling, although it has not been determined whether there is any and how much it amounts to. This intention was abandoned in 2022, only to be announced again in the fiscal strategy from July last year. It also did not mention any research on the extent of fuel smuggling, but that this measure would generate five million in annual revenue for the budget due to the suppression of the illegal market.
According to the energy balance, Montenegro imports 420 million liters of petroleum products annually. If the cost of marking were one cent, it would amount to 4,2 million euros, or almost equal to the revenues the state expects from suppressing the alleged gray market in petroleum products.
During previous discussions on fuel marking, domestic petroleum product traders pointed out that the entire procedure was pointless because fuel is marked on legal imports after excise duties and VAT have been paid on it, and that illegal fuel imports are now practically impossible. They also stated that there could now be two types of fuel smuggling: those who import it without excise duties, and employees of state-owned companies who illegally sell fuel taken from these companies (which is also marked) on the market at a significantly lower price, to the detriment of legal traders.
They also claimed that the costs of branding would be greater than the potential benefits to the state, and that it was wrong to impose these costs on retailers and consumers.
Additional problems will be faced by domestic oil traders who do not buy fuel from Jugopetrol, which is the only one that has and continues to use the state-owned oil terminals in Bar, because they buy fuel and deliver it in tankers by road. They will have to announce each tanker in advance, as stated in the amendments, so that officers from a licensed laboratory can insert markers (fine powder into the fuel) and then measure the marker concentration. If the marker concentration is higher than 95 percent, the importer will be issued a certificate of marking.
All of this procedure means that the import and transport of fuel will take significantly longer than before and will therefore be more expensive for traders, because in addition to marking, they will have higher transport costs, but also uncertainty about supply. Because of this, they believed that someone from the state was deliberately pushing them to buy fuel from Jugopetrol, which has a monopoly on cheaper supplies by sea.
Since the entire chapter, which completely changes the current method of import and supply, was added to the law without public debate and without announcement, a meeting of petroleum product traders has been scheduled for Monday at the Chamber of Commerce.
They claim that the added substances do not affect the quality of the fuel.
The Fiscal Strategy from July last year envisaged that marking would begin to be implemented by the end of that year.
"The amendments to the Energy Law will prescribe the obligation to mark fuel with a special substance, which does not affect the quality of the fuel and which would identify during control whether the fuel originates from illegal traffic, which will ensure an increase in budget revenues through more efficient collection of excise duty on the basis of the traffic of liquid fuels and biofuels. The implementation of this solution will enable additional control of liquid fuels of petroleum origin and biofuels at every stage of traffic, which will contribute to preventing unfair competition and strengthening tax discipline by traffic participants," it is stated in the explanation of this measure in the Fiscal Strategy.
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