Serbia's excise tax changes a political move to control fuel prices: journalist

Proposed amendments to Serbia's Excise Law are a "political maneuver" designed to keep fuel prices down, according to Forbes Serbia journalist Petrica Djakovic. The changes would remove the current cap limiting excise duty reductions to 20%, allowing the government greater flexibility to stabilize prices.

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Proposed amendments to Serbia's Excise Law would give the government greater flexibility to keep fuel prices under control and amount to "a political manoeuvre", as higher fuel prices are currently not in the authorities' interest.

Djakovic also highlighted the ongoing uncertainty surrounding the ownership of NIS, Serbia's majority Russian-owned oil company. She noted that Hungary's MOL, previously the only potential buyer offering some information, has stopped commenting. This silence, coupled with President Aleksandar Vucic's recent statement about expecting a deal to be finalized soon, raises questions about the negotiations' progress.

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Until about a month ago, Hungary's MOL was the only potential buyer providing at least some information, even if only in small doses. During July, however, even MOL stopped commenting.

The practice of extending U.S. sanctions waivers for NIS on a month-by-month basis has become unsustainable. Djakovic suggested that if the U.S. Treasury's Office of Foreign Assets Control (OFAC) intended to resolve the issue, it could have done so months ago. Such action would have forced Gazprom Neft to sell its stake, sell to the Serbian state, or suspend NIS's operations, a scenario Serbia cannot afford due to its reliance on the refinery.

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If we look at President Aleksandar Vucic's statement yesterday that he expects the deal to be finalised soon, we can either believe negotiations are genuinely nearing completion or question whether such negotiations are taking place at all.

Fuel prices in Serbia continue to rise, and the government's proposed excise law amendments aim to mitigate this. Djakovic believes citizens can expect lower fuel prices as a result, reiterating that the move is political and serves the government's interest in avoiding price hikes at this particular moment.

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If OFAC had wanted to bring this situation to an end, it could have done so several months ago. That would have forced Gazprom Neft either to sell its stake to a third party, sell it to the Serbian state, or suspend NIS's operations until sanctions were lifted.