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State dissatisfied with the policy of oil traders, is the market liberalized?

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The Serbian government is not fully satisfied with the pricing of most of the oil companies operating in the Serbian market, adviser to Serbian Prime Minister for Energy Petar Skundric said yesterday and announced that the state will take all necessary measures to protect the interests of citizens and the economy, if necessary.

There is no such a liberalized market as the one we have here, where it is allowed to generate extra profit on trading oil and petroleum products, and be eventually paid by the citizens, but “Serbia has not entered that zone yet,” said Skundric, who participated in the expert meeting on the market motor fuels in Serbia.

“We have not entered that zone yet, but if we get into the zone where margins grow uncontrollably, the state will have to reach for those measures for which the countries of the European Union and other countries in the developed world reach,” said Skundric and pointed out that liberalization market does not consider self-will behavior of market participants, but means respecting those laws and regulations of the state, which regulates the market.

 ‘For that reason we should take advantage of all the conditions that this market offers, in order to achieve the best quality and fair price of petroleum products for the citizens and economy, from the standpoint of overall price movements in the region and in Europe’, said Skundric.

 ‘We are aware of the fact that fuel would be more expensive had we kept the formula model according to which the state determined the highest retail prices, but now we have higher prices in the market because we had not applied the Mediterranean formula, said the prime minister’s adviser for the energy sector.

We are also facing the cases of illegal trade in oil products and the state must take the most rigorous measures to prevent all forms of smuggling and sanction any disrespect of standards that occurred at some stations, said Skundric.

This deprives Serbian citizens and budget, and because of poor quality the damage of rolling stock is possible, specified adviser to Prime Minister for Energy.

“Once the modernization of NIS refineries in Pancevo is completed and if you reach a coupled system between the NIS and petrochemistry, favorable conditions will be created for a competitive fight for every consumer through better quality and better price for consumers,” mentioned Skundric at the meeting organized by the Serbian Oil and Gas Association Snaga and Chamber of Commerce of Serbia (PKS), supported by the National Petroleum Committee of Serbia.

He announced that Serbia will actively participate in the 20th Jubilee Congress of the World Petroleum Council in Qatar in December this year, which more than 3,000 participants, about 300 directors of world oil companies and 30 energy ministers will attend.

Market Inspection of the Ministry of Trade had not find greater market abuse since the beginning of this year, when the market of petroleum products were liberalized in Serbia, it was said at the meeting in the Chamber of Commerce.

The plan is to control gas stations in order to prevent possible abuse in the use of heating oil instead of diesel D-2, because oil companies and the state are at loss since it deprives budget, giving the fact that heating oil is not subject to excise tax, like diesel fuel.

The consultant of “Karni” Zlatko Bazianec said that Serbia and Hungary have higher price of unleaded petrol from other countries in the region, due to high excise duties and VAT, and the trading price of unleaded petrol is not much different from the price in the region.

He said that the reason for the high price of diesel D-2 is the trade price of this type of fuel, noting that the region has a high share of excise in total state budget, since neighboring countries do not have a strong economy, which is why it is not expected that any state in the region will reduce the amount of excise tax in order not to jeopardize their own budget.

Director of Marketing at block traffic in NIS Senka Valid stated that in 2011 it is expected lower consumption of gasoline and liquefied petroleum gas by eight percent compared to the year 2010 due to the falling purchasing power, standard of living and the global trend, the so called “dieseling market”, in other words a larger share of diesel in total consumption of petroleum products.

In the next year the consumption of diesel is expected to increase by 1.6 percent compared to the year 2010, and it is estimated that the total consumption of euro diesel in total use will be 65 percent, added Valid.

She pointed out that the modernization of NIS refinery in Pancevo entered the middle phase and it is planned to be completed by the third quarter of the year 2012. As she emphasized, in 2013 NIS will be processing 3.8 million tons of oil and produce high-quality European standard fuel types.



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