Fuel is running low, the government is not in crisis yet - meetings between oil industry and government ended without a clear agreement

The Ministry of Energy yesterday refused to release fuel from strategic reserves to oil companies, which yesterday ran out of Eurodiesel or had minimal quantities left, while in response to the other two proposals for resolving the crisis, to completely liberalize prices or significantly reduce excise duties, they responded that they would analyze and decide in the coming days.

This is how "Vijesti" learned from several participants of the epilogue of yesterday's meeting of oil company representatives with officials from the ministries of energy, finance and the Customs Administration.

By 19 p.m. last night, according to information from “Vijesti”, 16 gas stations reported that they were out of Eurodiesel, and another dozen were at a minimum and will probably be out of this fuel today. Several gas stations ran out of both regular and diesel with additives. The most critical situation was in Bar, where two of the three city gas stations ran out of this fuel. The “Eko” gas station on Jovana Tomaševića Street in the center of Bar had it, but the line stretched all the way to the exit from the Šušanj settlement, near the bridge over the Željeznica River.

The Ministry of Economy yesterday set new prices, effective from midnight last night, according to which the price of Eurodiesel increased by 16 cents and the price of two types of gasoline by seven cents each. The Minister Admir Šahmanović On Sunday evening, he claimed that the calculations that diesel would increase in price by 16 cents, but by 14 cents, were not correct, and that gasoline prices would increase by six cents, not seven cents.

The Association of Oil Companies announced on Sunday that suppliers have announced that they will not make new deliveries to Montenegro as of Friday because the price of Eurodiesel on the stock exchanges is 40 cents higher than the retail price at Montenegrin gas stations, and warned that this could cause shortages of this fuel unless the government introduces free pricing or significantly abolishes excise duties on this derivative, so that the selling price is at least slightly higher than the purchase price.

Šahmanović then said that Montenegro has reserves of around 45 thousand metric tons of fuel, which is enough for a month, and asserted that there will be no shortages.

Prime Minister Milojko Spajic said yesterday morning that Montenegro has strategic reserves of petroleum products which, along with commercial supplies, ensure market stability and normal consumption for about two months.

Due to these problems, the Ministry yesterday convened the Council for Ensuring the Secure Supply of Petroleum Products to the Market, which also includes representatives of oil companies.

As explained to "Vijesti", the reserves mentioned by the minister and the prime minister are not state reserves because they have not yet been formed, but rather reserves that, according to the new law, the three largest fuel traders in Montenegro are obliged to possess and that this fuel is their property. It was also pointed out that just over half of this quantity is located in Montenegro, and that the rest is in so-called tickets.

"Vijesti" asked the ministry and the Prime Minister's Office how many of these strategic reserves are in Montenegro, how much of them are owned by the state and how much by private companies, as well as what legal possibilities exist for the Government to force private companies to release these reserves to the market and at what prices. They were also asked whether the Government in such cases covers the costs that these companies may incur if they are forced to sell fuel at prices that are lower than market prices, because they must again compensate for this fuel in their quota. No answers were received by the end of the day last night.

How they can obtain fuel from these reserves is also of interest to the owners of oil companies who have had problems with procurement in recent days and who have run out of Eurodiesel or whose available quantities are at a minimum.

Two of Vijesti's interlocutors from the meeting confirmed that Minister Šahmanović replied that, according to the law, this fuel from strategic reserves can only be used in cases of complete suspension of supplies and shortages on the market, and that it cannot be used to lower prices on the market. He assessed that the current supply crisis is not so great that these reserves should be touched and that they will not be sold to gas stations that are now out of fuel.

A representative of one of the large retailers said that they now have fuel, but that because the purchase prices of diesel are higher than the new selling prices, they are losing four to six thousand euros for each tank of fuel sold, or that if this situation persists until the next adjustment in two weeks, they would lose a total of five million euros.

Oil prices on international stock exchanges increased by almost seven percent yesterday, from $92 to $98 per barrel. At their opening yesterday morning, there was a big jump of 25 percent to $118, but this was after the announcement from the G7 that they would use their oil reserves for market interventions to mitigate the price increase.

The government will analyze the reduction of excise duties or free prices in the next two or three days.

Yesterday, traders proposed to the government representatives to change the current regulation, that is, to move to free pricing that would be valid for one or three days and would depend entirely on the rise or fall of prices on international stock exchanges. It was also proposed that the government waive part of the excise duties on fuel, because according to the law they can be temporarily halved. For example, if according to the price on the stock exchanges the fuel should increase by 40 cents, the increase would be 20 cents, and the state would waive the same amount through a reduction in duties.

Interlocutors of "Vijesti" indicate that representatives of the ministries of energy and finance responded to this by saying that they are analyzing similar models and that a decision will be made in the coming days. Representatives of traders stated that the situation is such that they cannot wait long for such a decision.

The Ministry of Finance said that the EU directive limits them from being able to reduce excise duties to less than 33 cents per liter, or that they can only reduce them by about 12 cents.

After the meeting with government representatives, all oil product traders had a meeting at the Chamber of Commerce where they unanimously called for the formation of a joint working group with state institutions "in order to urgently establish a model for temporary fuel price formation in line with their daily growth at the global level."

"The gap between purchase and sale prices is increasing, creating financial losses for companies and disruptions in supply chains," the group said in a statement.

Croatia did something similar yesterday, where prices have so far been set freely only with the notification of the relevant ministry. When they received notification yesterday that the new price of Eurodiesel should be increased from 1,5 to 1,72 euros, they decided on a combined model - a price increase of five cents with a reduction in state duties on the price.

A big jump in the price of jet fuel

On international stock exchanges in recent days, there has been a drastic increase in the price of jet fuel by about 60 percent, from about 780 to 1.250 dollars per ton.

Reuters published an analysis of jet fuel prices yesterday, stating that it will cause a large increase in airline ticket prices, as well as a decline in airline revenues, as well as less travel and tourism turnover.

They also pointed out that there had been a significant drop in the share prices of major international airlines on the stock exchanges.

"Some airline tickets now cost up to seven times more than they did seven days ago. Analysts are warning of a drop in travel demand and the possible grounding of part of the fleet," Reuters reports.

An interlocutor of "Vijesti" from this business indicated that this is very bad news before the start of the tourist season, and that this price level could be devastating for the airline industry and tourism if they remain at this level for a long time.