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Since 15 September, diesel has been sold with 10% VAT instead of 18%. The measure runs until 28 September, which means it expires at midnight. As of now there's no official decision on whether it will be extended. Drivers will find out what a litre costs from tomorrow when they pull up at the pump.
A litre of Eurodiesel currently costs at most 104.50 denars, Eurosuper BS-95 99 denars and BS-98 101 denars. Those prices have applied since 22 September, when petrol got 1.50 denars cheaper and diesel 5.50 denars dearer. The Energy Regulatory Commission is doing a new calculation today for the next seven days, based on the average exchange price over the past week, the dollar rate, margins, excise duty and - last of all - VAT.
The maths is simple. If today's price of 104.50 denars is calculated with 18% VAT instead of 10%, without touching any other item, a litre goes up by more than seven denars. That doesn't mean diesel will automatically cost that much more, because the exchange-price part of the formula changes too. But it does mean the tax alone could deliver a bigger price rise than diesel's entire jump last week.
Energy Minister Sanja Božinovska last week put the situation down to "force majeure, a war we can't influence". On VAT she said: "We're discussing, we're looking at it, and we'll consult at government level. We're certainly in favour of protecting citizens' living standards, but we'll also have to consider the fiscal implications." The war really isn't in the government's hands. The expiry date of its own measure is.
Deputy Minister of Economy and Labour Marjan Risteski calculated that the VAT cut was saving citizens up to 350,000 euros a day. If that figure is right, that's up to 4.9 million euros over the two weeks. A measure worth that much, and right up to the last day nobody will say whether it applies tomorrow?
The pressure isn't coming from the domestic market. Europe is facing a diesel shortage, and Brent crude traded between 104 and 106 dollars a barrel last week. According to price-tracking platforms, Macedonia is still among the countries with the cheapest diesel in Europe, averaging almost 1.7 euros a litre. In Serbia and Slovenia a litre costs over two euros, in Greece around 2.2 and in Croatia around 1.9 euros.
Currently in force are the VAT cut on diesel and a four-denar lower excise duty on all fuels. The prime minister has repeatedly promised additional measures "if needed". If they're not needed now, with the measure expiring in a few hours, when will they be?
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