Transport Association: Rising fuel prices will inevitably lead to an increase in transportation costs, which will be felt by all citizens

The Transport Association of Montenegro announced that the increase in fuel prices will inevitably lead to an increase in the cost of transportation, and that all citizens will feel it.

"We had previously received an announcement from the Minister of Energy and Mining that the possibility of introducing measures to assist transporters in order to mitigate the consequences of rising fuel prices was being considered. However, none of these announcements have been implemented to date, so the promises have remained just words, while transporters are facing increasing business costs every day," said the president of the Association, Đorđije Lješnjak.

He pointed out that the decisions of the Government, namely the actions of the Ministry of Finance and the Customs Administration, have eliminated the possibility for carriers to refund part of the excise duty paid on fuel due to the previous reduction in excise duties.

"This directly damaged the road transport sector for significant funds that represented one of the rare mechanisms for mitigating high fuel costs. It is particularly absurd that fishermen and regular passenger transporters still have the right to a refund of part of the excise tax, even during the period when the Government is implementing measures to reduce excise taxes, while freight transporters are denied this right. It is freight transporters who deliver food, medicines, construction materials, raw materials and all other products necessary for the functioning of the economy and the normal life of citizens on a daily basis. Such differential treatment of a sector that represents the backbone of the supply chain is not justified and places domestic freight transporters in an unequal position," said Lješnjak.

Instead of standing behind domestic carriers in these, as he stated, crisis circumstances and introducing crisis support measures that would enable the preservation of the stability of the sector and prevent further price increases, the state is withholding funds that were intended as support through the excise duty refund system.

"Transporters can no longer be the ones who will compensate for the shortfall in budget revenues from excise taxes on diesel fuel with their operations. The burden of fiscal policy cannot be shifted to an industry on which the supply of the entire country depends. If the Government again resorts to measures to reduce excise taxes, and does not provide a mechanism by which transporters would retain the right to a refund of part of the excise tax, the consequences will be even more serious. In that case, transporters will be forced to increase the prices of their services to an even greater extent in order to be able to maintain their business at all."

Lješnjak adds that the consequences of this state's attitude towards the transport sector will not only be borne by transporters.

"Any increase in transport costs directly affects the price increase of almost all products and services, because transport is an indispensable part of every supply chain. This means that the ultimate burden will once again fall on citizens and the economy through price increases and additional inflationary pressure. We remind you that fuel prices have increased by more than 25 percent in the previous period, while transporters, in an effort to protect their clients and maintain competitiveness, have increased transport prices by only 10 to 12 percent. They have been covering the difference from their own funds for months, operating at the limit of sustainability. However, if the trend of rising fuel prices continues, transporters will no longer be able to absorb additional costs on their own. They will be forced to adjust transport prices to the actual increase in input costs, which means that the increase could reach around 25 percent," said Lješnjak.

The Association of Transporters called on the Government to urgently take concrete measures to support the road transport sector, fulfill previously made promises, and establish a sustainable model that will enable the preservation of the competitiveness of domestic transporters.

"Otherwise, the consequences of such a policy will be felt by the entire economy and all citizens of Montenegro through further price increases and additional inflationary pressure. The time for promises is over. Concrete measures are needed that will protect domestic carriers, preserve the stability of the supply chain, and prevent a new wave of price increases that will affect every citizen of Montenegro."