Diesel in Serbia Costs More Than in 27 European Countries
A litre of diesel in Serbia sells for 1.91 euros, more than in 27 European countries, while petrol at 1.70 euros sits mid-table. Economists point to excise duties and an opaque input price.
A litre of Euro diesel in Serbia costs 1.91 euros, according to globalpetrolprices.com figures for July 27, and that is higher than in 27 European countries. Petrol sits at 1.70 euros, which puts Serbia squarely in the middle of the table: cheaper than 20 countries, dearer than 22.
The list of markets where diesel is cheaper than in Serbia is not made up only of poorer economies. Alongside Belarus, Russia, Malta, Turkey and Moldova, it includes Bosnia and Herzegovina, North Macedonia, Croatia, Montenegro and Slovenia.
Where diesel stands across Europe
Denmark tops the table at 2.32 euros a litre, with the Netherlands and Switzerland right behind, both at 2.31 euros. The bottom belongs to Belarus at 0.82 euros, then Russia at 0.91 and Malta at 1.21. The gap between Europe’s dearest and cheapest pump comes to 1.50 euros a litre, close to a threefold difference.
Petrol follows a similar order at the top: Denmark 2.38 euros, the Netherlands 2.34 and Finland 2.15. The lowest prices are recorded in Russia and Belarus at 0.82 euros each, followed by Turkey at 1.24 and Malta at 1.34.
Those two columns are what makes this a domestic story. On petrol Serbia belongs to the European average, on diesel it breaks through it. Diesel powers trucks, buses, farm machinery and most of the vehicle fleets run by Serbian companies, so every dinar of difference feeds into haulage costs and from there into shelf prices.
The domestic price cap and the neighbours
The prices in force until Friday, July 31 at 3pm are capped at 224 dinars a litre for Euro diesel and 200 dinars for Euro Premium BMB 95. Both fuels rose by two dinars last week, which we covered in our report on the price increase and the lower excise duty running to August 2.
Against the neighbourhood the differences are measured in dinars per litre:
- in Croatia petrol costs 1.62 euros, roughly nine dinars less than in Serbia, and diesel 1.75 euros, about 17 dinars less
- in Montenegro diesel is around 29 dinars cheaper
- in Bosnia and Herzegovina around 35 dinars cheaper
- in North Macedonia around 43 dinars cheaper
On a 60 litre tank, the gap against a Macedonian pump works out at roughly 2,580 dinars per fill. A haulier filling five trucks a week at 300 litres each counts that difference in tens of thousands of dinars a month.
Why is diesel dearer in Serbia than next door?
Goran Radosavljevic, a professor of economics, traces the cause to the level of public spending and how it is funded.
The state spends a great deal, the state is expensive, and that is why it takes more from its citizens through taxes and excise duties than other countries in the region
Radosavljevic adds that the excise rate is not the only issue, because buyers cannot see what the price is built on.
The problem is that we do not know what that input price is, they calculate a Mediterranean price that has no relevance for us
Mining and Energy Minister Dubravka Djedovic Handanovic cites the low water level on the Danube as one reason for the higher prices. Because of it, fuel is moved to storage by truck and rail instead of by barge, and that transport costs more per tonne. Radosavljevic does not accept the explanation as sufficient.
That is not a good enough reason to justify the rise in fuel prices, it is an irresponsible state
Nebojsa Atanackovic of the Serbian Association of Employers reads the government’s move differently.
This reaction by the government, to cut excise duties by 20 percent, is what kept prices from going even higher
The government has cut excise duties on fuel by a combined 20% and extended the measure to August 2. Without it both figures on the display board would be higher than they are, and the arithmetic explains why: excise is a fixed amount per litre and does not fall when crude prices fall.
Three deadlines in the same week
The calendar is tighter than usual this time. The fuel price cap runs until July 31 at 3pm, when the ministry publishes new maximum amounts. The same day the US Office of Foreign Assets Control (OFAC) licence under which the Pancevo refinery operates expires, and that plant supplies most of the domestic fuel market. The excise relief lasts two days longer, to August 2.
If all three deadlines are not extended, the next price list will be more than a routine weekly adjustment. A driver paying 224 dinars a litre for Euro diesel today will know by Monday whether 1.91 euros was the ceiling or the floor for this summer.
