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Government keeps the fuel subsidies until 18 May, diesel down by 3 denars - but nobody is saying what happens after

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The government is keeping the favourable measures on fuel until 18 May, and announcing a new price drop this week. Diesel is down by 3 denars, petrol by 2 denars per litre. Prime Minister Mickoski insists the government will hold the „protective standard" - translation: not a single driver will pay more while the government is in office.

But there is one detail that isn't being communicated loudly. The authorities are at the same time investigating whether some oil companies are exploiting the subsidised fuel and quietly re-exporting it to neighbouring countries. Translation: someone may be buying at the reduced price and selling on into Kosovo, Albania or Bulgaria at the normal one. That way the state subsidy disappears before it reaches a Macedonian driver.

This is not a new scheme. It has happened with subsidised cigarettes, with subsidised oil. When there is a price gap between two countries - and one market is subsidised - „market solutions" appear that are illegal on paper but happen every day in practice.

The question worth asking: if the subsidy runs until 18 May, what happens after that? Global fuel prices are not coming down - quite the opposite, with the war in Iran and the Hormuz blockade, they are pushing up. If the government passes prices through to drivers after 18 May, the shock will be 5-7 denars a litre. That means transport jumps, and with transport, everything on the market shelf jumps with it.

The irony is that the subsidy is a political decision in the run-up to local elections. That is also why the increase in public spending is being permitted. But a political decision cannot last forever, and when it breaks, citizens will feel it in two packages - in the price of petrol, and in the price of everything else. The subsidy will then turn into one of those measures people remember existed, but nobody can say precisely when they ended.