Fuel prices in Montenegro could increase by seven to eight cents per liter from Monday, if current prices on international oil derivatives exchanges remain until the end of the week. However, they started to fall yesterday after four days of growth following announcements by OPEC (Organization of Petroleum Producers) members that they would increase production and the announcement by the US administration that they would increase the release of oil derivatives from their reserves to limit further price increases.
Before the new Israeli and US attack on Iran and its attacks on the Persian Gulf states, the price of a barrel of oil was $72, and then it started to rise. On Tuesday, the barrel was $84, but yesterday the price started to fall and by the end of the day it was below $81.
On Monday, the Ministry of Energy and Mining will calculate fuel prices that will be valid from midnight on Monday for the next 14 days, based on the retail price adjustment formula (oil product prices and the dollar-euro exchange rate). Oil product prices for the formula are taken from the end of this week compared to those from the previous adjustment two weeks ago.
"It is difficult to predict what the price of petroleum products will be at the end of the day on Friday, because the figures important for our formula change from hour to hour, as do the news about the war events in the Middle East. On Wednesday, there was a little more optimism compared to the previous days, that there would be no drastic increase in prices. Also, the currency ratio between the dollar and the euro is very unstable because first we had a drop in the dollar, and now a slight recovery," said an interlocutor of "Vijesti" from the oil business.
According to data that was current yesterday at the end of the working day, fuel prices in Montenegro would be seven to eight cents higher than the current prices.
US investment group Goldman Sachs said yesterday that oil prices fell on Wednesday, but are still 12 percent higher than they were before the conflict began. They raised their forecast that oil prices would remain higher than before the conflict, citing damage to oil production facilities in the Persian Gulf and the difficulty of exporting oil and gas through the Strait of Hormuz, which lies between the Persian Gulf and the Indian Ocean. They said the inability to export through the strait is causing producers to stock up, which is reducing production, while at the same time creating a problem for buyers as inventories fall.
Montenegro does not yet have operational state reserves of petroleum products. In late February, the Hydrocarbons Administration announced a second tender for the procurement of the first quantity of state mandatory oil reserves, 19,6 million liters of Eurodiesel to be stored at the oil terminal in the port of Bar. The first tender was canceled in mid-January after it was determined that the only bid received from the company “Jugopetrol” was not correct.
State reserves would have the role of mitigating possible shortages on the international market, but also the possibility of being used in the event of a large price increase.
The government can mitigate price increases by reducing excise taxes
The government has the legal option, due to the large increase in the prices of petroleum products on the market, to temporarily reduce the amount of excise duty by up to 50 percent, which currently amounts to 33 and 44 cents per liter, which is included in the basis for calculating the 21 percent VAT.
"Vijesti" sent questions to the ministries of energy and finance, asking whether they would propose to the Government a temporary reduction in excise duties if the formula for calculating fuel prices shows that there will be a larger price increase on Monday.
The Ministry of Energy told "Vijesti" that they are monitoring the situation daily and that they will calculate new prices on Monday, and that the Ministry of Finance is responsible for possibly proposing a decision to the Government on a temporary reduction in excise duties on fuel.
"Vijesti" is still waiting for a response from the Ministry of Finance.
The government last implemented these measures in 2023, when it reduced excise duties first by 25 percent and then by 15 percent.
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