Is Serbia on verge of "crisis management" mode: Real price of fuel is 240 dinars - and what that means

Photo: Shutterstock

The global energy market has once again entered the high risk zone, and Serbia is reacting to this politically and fiscally. President Aleksandar Vucic convened an emergency meeting of the Council for National Security in order to respond to the sudden spike in oil prices and the potential impact on the economy, which is a clear signal that the energy crisis is shifting from a market to a security issue.

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Photo: Tanjug/JADRANKA ILIC

As the price of crude oil on the global market has reached $110-112 per barrel due to the escalation of conflicts in the Middle East and attacks on key energy infrastructure, countries around the world are entering a crisis management mode.

For Serbia, this means direct pressure on the inflation rate, the budget and the standard of living.

State already intervening: Reserves, excise duties, price control

According to announcements made by the authorities, Serbia's response is based on a combination of spending commodity reserves and fiscal interventions through excise duties, which is a classic anti-crisis model for absorbing external shocks.

In practice, this means: releasing tens of thousands of tons of diesel from the reserves, reducing excise duties on fuel, and trying to administratively moderate the rise in retail prices.

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The goal is clear: to prevent a sharp spike in fuel prices that would spill over to all other sectors, from transport to food processing.

Since energy is a basic input, when oil becomes more expensive, everything becomes more expensive.

Real price of fuel is already above "psychological threshold"

Although the government is trying to cushion the blow, market signals are relentless. According to asessments coming from the energy sector, the real price of diesel already ranges between 240 and 250 dinars per liter, which is a level that the government is trying not to allow at gas stations.

This means that the state is in fact subsidizing the difference between the market and the controlled price, which directly burdens the budget.

There is a clear limit in such a model: the longer the crisis lasts, the higher the fiscal cost.

Geopolitics dictates economy

The root cause of this crisis is not economic, but geopolitical. Attacks on energy facilities in the Persian Gulf and threats of blocking key maritime routes have led to disruptions in global supply and spikes in energy prices.

Photo: Tanjug/Milos Milivojevic

Such shocks have a chain effect: rising oil prices lead to rising transport prices which lead to rising food prices which lead to inflationary waves.

That is why the president is warning that the situation is uncertain in the mid term, and that no one can guarantee what will happen in two or three months.

Energy reserves as key to stability

One of the few positive elements at the moment is the fact that Serbia has significant energy reserves. According to official data, the state has more reserves, in proportion to consumption, than most countries in the region, which leaves room for short-term interventions.

But this is not a permanent solution. Reserves buy time, they don't solve the problem.

Endurance test for economy

This crisis raises several key questions for Serbia's economic policy: how to balance protecting the standard of living with protecting the budget, how long the state can control prices and whether inflationary pressure will spread to the wider economic system.

At this moment, the most important message coming from the authorities is an attempt to calm the market and citizens, along with appeals that there is no need to panic.

However, behind that appeal is the reality: Serbia is entering a period in which the price of energy is becoming a central economic issue and potentially the biggest risk for stability in 2026.

(Telegraf Biznis)