Government temporarily mitigates expected fuel price increase through excise duty adjustment

Based on a comprehensive analysis by the Ministry of Finance of developments in international oil prices and their impact on citizens' living standards and the business environment in Montenegro, the Government has decided to temporarily mitigate the expected increase in retail fuel prices through an adjustment of excise duties.

Through this targeted intervention, the Government will ensure that retail fuel prices remain lower than they would otherwise be. Until the next price adjustment, diesel will cost €1.65 per litre, instead of the expected €1.81, while the price of petrol will remain unchanged instead of increasing by an expected 7 to 8 cents per litre.

This measure forms part of the Government's responsible fiscal policy aimed at preserving citizens' purchasing power, containing inflationary pressures and supporting the economy. The current rise in fuel prices is driven by developments in the international oil market, geopolitical tensions and the conflict in the Middle East, factors beyond Montenegro's control.

The Government recalls that it has previously made use of the legal mechanism allowing for a temporary reduction in excise duties whenever this was justified in order to cushion increases in fuel prices. At the same time, given that a significant share of fuel during the peak tourist season is purchased by foreign tourists and transit travellers, taxpayers' funds must be managed with particular care. This means that, during the tourist season, public resources should not be used to subsidise the fuel consumption of visitors instead of financing healthcare, education, pensions, capital investments and other public services.

A responsible fiscal policy means introducing state measures when they provide the greatest benefit to Montenegro's citizens and domestic economy, rather than when their primary effect would be to subsidise the seasonal consumption of foreign visitors.

The Government will continue to closely monitor market developments and, in line with available fiscal space, take timely measures to protect the interests of citizens and preserve economic stability.