Serbia's fuel excise tax cut unlikely to significantly lower prices

Despite the Serbian government's decision to further reduce excise taxes on petroleum products by 5%, fuel prices are unlikely to see a substantial decrease, according to Milojko Arsić, a professor at the University of Belgrade's Faculty of Economics. The government has now implemented a total excise reduction of 10% on fuel, with the temporary rates for leaded gasoline, unleaded gasoline, and diesel set to be in effect until July 19. Arsić pointed out that fuel prices in Serbia remain significantly higher compared to neighboring countries like North Macedonia, Bosnia and Herzegovina, and others. He attributed this difference primarily to substantially lower excise taxes in those nations. "Compared to Serbia, excise taxes are significantly lower in North Macedonia, Bosnia and Herzegovina, and other surrounding countries," Arsić told the Beta news agency. He explained that higher fuel taxes in Serbia are necessary to fund state expenditures, which constitute about 40% of the country's gross domestic product. Arsić suggested that if the state were to utilize these funds more efficiently, without waste or corruption, and by selecting justifiable projects, the burden on citizens might be lessened. Currently, the maximum retail price for a liter of Eurodiesel in Serbia is 220 dinars (approximately 1.88 euros), and for a liter of gasoline, it is 196 dinars (approximately 1.67 euros). In comparison, North Macedonia's maximum retail price for Eurodiesel is 88 Macedonian denars (about 1.66 euros), and for Eurosuper 95 gasoline, it is 87 denars (about 1.64 euros).