13:39 / 07.06.2022.

Author: Branko Lozančić

Minister Marić: With the measures we are adopting, we have calmed the market

Finance Minister Zdravko Marić

Finance Minister Zdravko Marić

Foto: HTV / HRT

Deputy Prime Minister and Minister of Finance Zdravko Marić said on Tuesday that the government's measures to reduce excise duties and limit margins on petrol and diesel contribute to keeping prices of derivatives from rising further this week, and he believes that due to these measures, there should not be a disruption in supply.

“As a state, in terms of encroaching on the excise duty system, and by limiting margins, we are all contributing to the fact that prices are not rising further this week. (...) With this set of measures, which last a month, and we will see how the situation will develop further, we believe that there should be no disturbances,” said Minister Zdravko Marić, answering questions from journalists commenting on the reaction from Slovenian Petrol Company that today “we are already facing a shortage of diesel and petrol on the market”.

Noting that he did not have time to look at all the publications and announcements, Marić said that it was logical that there were different reactions to such a decision. He recalled that with the first set of measures, at the end of last year, the government reacted administratively to the rise in oil and derivatives prices and froze the prices of basic gasoline and diesel.

However, when oil prices on international markets went up, the government changed the modality of measures and started lowering excise duties or limiting margins, rather than administratively regulating the total price to prevent exactly what was mentioned - so as not to jeopardize supply of those fuels.

“On that track, we continued with the measures,” said Marić.

Namely, yesterday at a telephone session, the government reduced distributors' margins by an additional ten lipa per liter, so the margin for petrol and diesel fuels was reduced from 75 lipa to 65 lipa per liter, and for blue diesel from 50 to 40 lipa per liter. At the same time, the Government reduced excise duties on gasoline and diesel fuels, on gasoline by an additional 40 cents per liter, which is a total of 80 cents, and on diesel by an additional 20 cents or a total of 40 cents.

“So far, we have reduced the excise tax from 3.86 kuna per liter to 3.06 kuna per liter for gasoline, and from 3.06 to 2.66 kuna per liter of diesel fuel, which means 80 and 40 lipa per liter,” he said. Prime Minister Andrej Plenković, announced that the prices of petroleum products will change every 14 days, and not every week as before.

According to data presented yesterday at a press conference after the government's telephone session, without government measures, diesel would cost 15.80 kuna per liter, petrol 15.78 kuna per liter, and blue diesel 10.87 kuna, while with the entry into force of government decrees from tomorrow diesel costs 13.08 kuna, petrol 13.50 kuna, and blue diesel 9.45 kuna.

In response to government decisions yesterday, Slovenian Petrol said that due to the unpredictability of the oil products market, we are currently in a very demanding period, and the additional market dynamics, which are reflected in rising oil prices, are affected by the embargo on oil imports and petroleum products originating in Russia.

"We are already facing a shortage of diesel and gasoline on the market. However, due to the EU embargo on Russian oil, additional supply disruptions and additional pressure on retail prices are expected. In such conditions, where fuel supply is limited, state price restrictions artificially stimulate higher demand and thus higher prices when they are no longer limited. We consider subsidies to be the most appropriate government measures in a way that does not undermine existing taxes and fees. Due to high volatility, prices should also be adjusted weekly rather than every 14 days,” stated Petrol in reaction to the Government's measures.

Journalists also asked Minister Marić about the possibility of taxing extra profits, for example, of companies in the energy sector.

Noting that some countries have resorted to this measure, Marić said that at this moment he would not go that far at all. He believes that it is understood that, in this complex situation, both the statements and measures by the Government are very cautious.

“We calmed the market with yesterday's measures and I think we can be satisfied with that,” he said. “On the other hand,” he added, “who can predict what will happen in the weeks ahead. We, of course, hope and believe and want to believe that there will be some calming. But we shall see how certain this is. A whole set of further measures is being considered and analyzed by the Government depending on need,” emphasized the Minister of Finance.

With so much uncertainty, it is difficult to predict the economic future

Commenting on a recent statement from JP Morgan CEO Jamie Dimon that they were "preparing for a hurricane" and then Goldman Sachs President John Waldron about the accumulation of shocks in the system and the expectation of difficult economic times ahead, Marić said he did not have such a global view to go that far.

“When there are crisis circumstances, when we have a lot of uncertainty, then such statements come and go,” said Marić, noting that the CEO of JP Morgan mentioned, on the one hand, strong wind, a hurricane, but on the other hand light wind. “In these circumstances, with such a level of uncertainty, it is difficult to predict in which direction it will go,” said Marić.

He reiterated that, in addition to inflation and how to mitigate its effect of not corroding and hitting so much on living standards and economic flows in Croatia and the EU, great emphasis should be placed on maintaining economic activity.

He also recalled that the Government has adjusted the growth rate for this year, but that rate is still in the positive sphere.

Source: HRT

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