FYROM Government under fire from private sector over decision to raise oil price

FYROM Government under fire from private sector over decision to raise oil price

Serious reservations about the correctness of the measure on the increase of the price of oil from the new year expressed the private sector in a conference organized in Skopje on Monday by the Economic Chamber of F.Y.R.O. Macedonia, in which Finance Minister Dragan Tevdovski presented to the business world the draft state budget for 2018 (photo).

Private sector representatives told the Finance Minister that an increase in diesel price by 3.54 dinars from January 2018 will hit certain manufacturing sectors, such as construction, transport and agriculture, and this they argued, could reduce the competitiveness of the FYROM economy.

FYROM’s finance minister said on his part that the increase oil prices will not cause inflationary pressures on the market, since, according to budget estimates for 2018, inflation will be 1,8%. At the same time, Dragan Tevdovski noted that the reduction of the budget deficit by 0.2% in 2018 must somehow be covered by an increase in revenue, which is why the oil price was chosen as a solution.

According to the draft budget for 2018, the deficit will be 2.7%, compared with 2.9% expected to close this year.

The government’s economic staff has justified the increase in oil prices, arguing that today the price of diesel in FYROM is by far the lowest among the countries in the region and therefore there is room for improvement, so that the increased revenue will go towards building roads in the country.

Today, the price of a liter of diesel fuel in FYROM is 52 dollars (0.85 euros).

It is noted that last week the government announced that from the new year the excise tax on oil will increase by three dinars. Together with the calculated VAT, the price of a liter of diesel (diesel) will be increased by a total of 3.54 dinars. A similar increase will also be applied to heating oil.

According to the calculations of the FYROM’s economic staff, the increase in the excise tax on oil will bring an extra revenue of EUR 32 million a year.

In the same workshop, the business community welcomed the part of the draft budget, which foresees an increase in spending by EUR 21 million for the implementation of the Public Investment Program in 2018, amounting to about EUR 400 million. At the same time, they asked for and this was immediately accepted by the Minister of Finance, a report on the extent to which the Public Investment Program is being implemented every three months.

The draft budget

According to the draft budget for 2018, it will be the highest in the history of the country.

Budget revenues for 2018 are projected to reach EUR 3.15 billion (4.7% higher than the 2017 budget), while spending will stand at EUR 3.45 billion (higher by 4.1% % relative to the 2017 budget).

The budget deficit for 2018 will be 2.7% (EUR 296 million), part of which will be covered by the Eurobond issue on international markets.

According to the draft budget for 2018, the GDP will increase next year by 3.2%./IBNA