Government has little room left to maneuver in fuel price mitigation strategy

Fuel prices are expected to rise again next week, according to some projections, and the government is planning more measures to ease the burden on consumers and businesses.

The government has little room left to further cut excise taxes and profit margins as it did two weeks ago as part of a mitigation strategy. Some analysts believe prices could jump by more than 70 lipa for Super unleaded, which would put the price at 14.20 kuna. Diesel is also expected to jump to 14.52 kuna.

“The wiggle-room that we have left with excise taxes, up to that minimum imposed by the European directive, is quite limited. After two interventions, we have less than 20 lipa left for diesel and around 36 or 37 lipa for Super unleaded. We'll have to wait and see," said Finance Minister Zdravko Marić on Friday.

Economy Minister Davor Filipović said the government would be hammering out a strategy over the weekend.

"No one can influence the price of oil derivatives on the world market. Last week and this week, oil prices went up. When the markets close today, we are going to do some calculations over the weekend and make a decision early next week,” Filipović.

The continued rise in fuel prices was one of the key issues talked about in the hallways of the Sabor on Friday. Opposition lawmakers are calling for more action from the government.

"Something can be done on the EU level. Why can't Croatia be the initiator and the leader on changing the directive and on lowering the VAT on fuel, as a temporary measure,” said Siniša Hajdaš Dončić of the SDP.

Možemo! MP Sandra Benčić thinks oil companies should pay higher taxes that could then be used to provide some relief to low income families.

"These huge extra profits that the oil companies are reaping should be taxed by a higher rate, just as a one-off this year, and that tax revenue should be invested into vouchers for people earning the lowest incomes," Benčić said.

Most MP Zvonimir Troskot reiterated his party’s position that the government needs to index pensions so that they keep pace with inflation.

"I think that we should start thinking about indexing pensions to raise them to levels that correspond to the increase in food and energy prices. Pensioners would end up putting all of that money back into the economy, so the risk of creating added inflation is minimal," said Troskot.