Serbia under Pressure in the Energy Market: The State as a Crisis Buffer

 

Photo: Engin Akyurt / Pexels

Interventionism and Market Protection

Direct state intervention in the fuel market resulted in a reduction of excise duties on petroleum products by approximately 60% in March 2026, while administrative price caps were maintained at around 188 dinars (approx. €1.6) for petrol and 212 dinars (approx. €1.8) for diesel. As a result, the state absorbs the gap between market and retail prices, which reaches as much as 20–24 dinars (approx. €0.17–0.20) per litre. According to government data, without these measures diesel prices could have risen to as much as 257 dinars per litre. This entails a tangible reduction in budget revenues, which under normal conditions amount to approximately €2 billion annually from fuel excise duties, making them a key source of state income. These measures do not increase actual supply but merely alter its distribution, providing short-term relief for the domestic market. At the same time, Belgrade resorted to extraordinary measures, releasing approximately 40,000 tonnes of diesel from strategic reserves, thereby strengthening control over fuel availability.

An additional risk factor remains the situation in the oil sector, particularly the operation of NIS (Naftna Industrija Srbije), the key player in Serbia’s fuel market. The company’s operations depend on a U.S. sanctions waiver, currently valid until 17 April 2026, due to its ownership links to Russia’s Gazprom Neft, which has been under sanctions since 2022.

In practice, this constrains the scope for stable cooperation with NIS and affects the functioning of the entire crude supply system. A critical moment came during the period without an active waiver at the turn of 2025/2026, after which oil deliveries via the Adria pipeline (operated by JANAF) were suspended for nearly 100 days. This exposed the vulnerability of Serbia’s energy system and demonstrated that its stability depends not only on domestic decisions, but also on external actors, most notably the United States.

Leadership and System Logic

The intervention model pursued by Aleksandar Vučić fits into a broader pattern of governance based on rapid and highly visible economic interventions aimed at containing social tensions. In the context of rising inflation, fuel price controls have become a key tool for limiting public discontent and stabilising political support.

At the same time, Serbia’s position outside the European Union gives it greater flexibility in pursuing such policies, allowing for swift fiscal and administrative intervention.

In the short term, state intervention cushions the impact of external shocks, while at the same time increasing the market’s dependence on political decisions. Keeping prices below market levels places a burden on the state budget and squeezes the profit margins of distributors. Ultimately, Serbia is not escaping the costs of the crisis; it is merely deferring them—trading short-term stability for a much more painful adjustment in the future.

The opinion expressed in the article represents the author’s private views, which are an integral part of their individual position.