The government claims it reacted in time, the opposition claims the opposite

The government's reaction to disruptions in the petroleum products market was timely and supply was not jeopardized, claim representatives of the executive branch, while opposition MPs believe that decisions were delayed and that citizens suffered damage.

Minister of Finance Novica Vuković said at the Parliamentary Committee on Economy, Finance and Budget that the escalation of the war in the Middle East has led to a sudden and significant increase in oil prices, which inevitably spilled over into the domestic market.

"In order to mitigate the negative effects, the Government reacted in a timely manner by making a decision to reduce the amount of excise duty on unleaded gasoline and gas oils," said Vuković at a thematic session on fuel prices and the supply of the Montenegrin market with petroleum products.

He stated that the monthly impact that the budget will suffer as a result is eight million euros.

Vuković announced that the Government is continuously monitoring developments in the international oil and oil derivatives market, as well as their impact on the domestic market.

"The priority is certainly to ensure orderly and stable supply without disruptions and disruptions, while at the same time mitigating any negative effects of price increases on citizens and the economy, to the extent that fiscal frameworks allow," explained Vuković.

He recalled that the Parliament had previously adopted amendments to the Law on Excise Duties, which created a legal basis for a more flexible and timely response to disruptions in the energy market. The aforementioned legal solution enabled a decision to be made to temporarily reduce excise duties on unleaded gasoline and gas oils by up to 50 percent in the event of a significant and sudden increase in the price of mineral oils on the world market.

"It is also important to point out that excise duties on mineral oils have significant fiscal significance, as they account for approximately 60 to 65 percent of total excise revenue and represent one of the most stable sources of budget revenue," said Vuković.

The Minister of Energy and Mining, Admir Šahmanović, believes that a responsible decision has been made that has enabled the excise duty on oil and oil derivatives to be reduced, using the legal basis.

"With the current price, we are in the top four countries with the most affordable prices in Europe. Only North Macedonia in the region is ahead of us, Slovakia, Turkey and Bulgaria with slightly lower prices," said Šahmanović.

He pointed to the emergence of so-called diesel tourists, which involves the arrival of citizens from neighboring countries, such as Albania and Serbia, to fill up with fuel, which, according to him, speaks of responsibility and competitiveness.

"In the last three years, in 15 accounting periods, the price has varied between 1,47 euros and 1,65 euros, so there hasn't been this much fanfare. The prices of electricity and oil and oil derivatives are at a somewhat tolerable level compared to all other countries. I don't know who has an interest in spreading this story and panic," Šahmanović added.

He added that he was considering whether to come to the Committee meeting today.

"It has become incredibly tiring lately that, in addition to all the obligations we have and the pain we are experiencing with this situation, we have to fight on a daily basis with the constant dissemination of incorrect information and the spread of unrest among citizens. However, I have decided that for the sake of the citizens, we will try to put an end to this story today," said Šahmanović.

He believes that the Government has made the most of the current situation, as this is the largest energy crisis in the history of mankind.

"Montenegro's supply of oil and oil derivatives has not been threatened at any time. Today, business is booming. Oil companies are operating without any difficulties. Now the only one losing is the state due to reduced excise duties, and I believe that this is a statesman's policy, and that our first priority is the interests of citizens, not individuals," said Šahmanović.

He stated that to date they have formed 40 percent of strategic oil reserves.

"Someone will say that these are not our reserves, but that is a malicious statement. So, these are our reserves, paid for with funds that we collected from citizens, and with our funds, three large oil companies, which are importers and import more than 15 thousand tons annually, formed these strategic reserves," explained Šahmanović.

Of that, as he said, 60 percent of 44,26 thousand metric tons are located in the Port of Bar in the tanks of Heellenic Petroleum, or Jugopetrol, for which the Government pays rent.

"The rest of the reserves are located in Croatia and Greece in the form of tickets. In relation to European laws, these reserves cannot be subject to any restrictions and they must be available to us within eight days of our request," Šahmanović added.

He said that the reconstruction of the reservoir in Bar is underway, and will be completed in six months. The reconstruction of the reservoir in Bijelo Polje requires 23 million euros, and the one in Lipci 16 million euros.

Democratic Party of Socialists (DPS) MP Nikola Milović said that he could not agree with Šahmanović and his claims that the Government reacted in a timely manner.

"My first reaction to the price increase and what was happening in the Middle East was on March 8, when you could have made a decision to reduce excise taxes on fuel and thereby reduce the increase in diesel prices, which increased by 23 cents in 15 days," said Milović.

He recalled that the Government borrowed 450 million euros before the New Year to create a reserve in case unforeseen circumstances arise.

"Is there that money in the budget? Who is more important today than the citizens of Montenegro, whom you have not protected, because prices have skyrocketed," Milović asked.

He also asked whether citizens can be calm, as food prices are set to rise.

"The citizens of Montenegro are paying the consequences of your 13 days of inaction. You cannot control inflation, and you have instruments that you do not want to use. The damage has been done and now the Government is trying to convince us that it did everything to protect you," Milović said.

The Chairman of the Committee and Social Democrats (SD) MP, Boris Mugoša, said that the budget does not belong to the Government, nor to the ministers, but to the citizens, and that it cannot be said that the state is giving up something or losing something.

"Citizens will not put the money that the state has not collected from excise taxes in a pile, but will spend it on purchasing other goods and services, so it will be returned to the budget through taxes," Mugoša explained.

He believes that there was room to reduce excise duties in the first wave of price increases, if not by 50 percent, then at least by 20 percent, in order to reduce the impact.

Bosniak Party MP Mirsad Nurković said that both ministers gave convincing arguments, which cannot be refuted by any argument.

He believes that it matters least when the reaction occurred, because the price would not change.

"Citizens have not suffered a single cent during that period. The Montenegrin market is absolutely supplied with the necessary quantities of petroleum products and will not have any problems with procurement," Nurković said.

MP from the Civic Movement URA, Miloš Konatar, said that Montenegro and the world are facing one of the biggest crises and added that he hopes it will not be bigger than the Covid crisis.

"Is it normal, if it carries such a danger, that the Prime Minister does not have a single conference where he would inform the public about the developments in the Middle East, the political dimension of the entire crisis, the position of the state and what the Government will do to resolve the crisis and help citizens and the economy," Konatar asked.

He said that citizens want to know whether certain subsidies will be provided, and that a plan and next measures must be put in place in case fuel prices continue to rise.

Europe Now Movement MP Dražen Petrić believes that the state has pursued a responsible policy, while his party colleague Tonći Janović stated that Montenegro has the cheapest fuel in the region, with the exception of North Macedonia.

Fidelity Consulting representative Miloš Vuković said that Montenegro does not have a crisis plan, although there was an obligation to do so.

He added that the private sector has completed all its obligations, while the state has not.

"The recommendation is to buy everything you can, because no one knows whether there will be oil or not. It is better to pay more for it than not to have it," said Miloš Vuković.

The Secretary General of the Association of Oil Companies, Draško Striković, announced that oil companies have been facing major problems for years.

"I am sure that no sector is as unfairly burdened as this one," Striković said.

He added that market competitiveness has been weakened, domestic companies are at risk, and that sudden market disruptions have threatened the sustainability of their businesses.

"It is necessary to consider the possibility of amending the existing provision in order to ensure long-term and sustainable development in this sector. Market liberalization is emerging as one of the possible instruments for protecting the economy and consumers, as it allows for greater resilience of the system to external costs," said Striković.