Excuse taxes introduced, import halted - In Serbia, only enthusiasts buy bio diesel

Although the first three months this year saw doubled increased in bio diesel import in comparison to 2012, procurement of this fuel as well as sales has almost been halted.

Not paying excise taxes of some 42 dinars per liter led to a sudden bio diesel import. Drivers were buying it instead of euro diesel because it was some 15 dinars cheaper at gas stations.

Expecting halt in sales of D2 diesel as of July 31, importers were preparing themselves for the biodiesel placement. However, as of May 30, excise tax on bio fuels was imposed so biodiesel price and diesel almost equaled.

Ljubinko Savic, independent adviser of the Association for Energy and Energy Mining SCC, in his interview for eKapija says that importers and oil derivatives traders turned to imported bio diesel since there is no domestic production.

- Import stared slowly and as of mid 2012 it implied bigger quantities. In 2012, a total of almost 2000 tons were imported. A sudden bio diesel import was generated in the first three months of 2013 when 4.165 tons were imported. The first half of 2013 saw an import of somewhat more than 8.200 tons. There was no registered domestic production – our collocutor says.

Tomislav Micovic, Secretary General at the Association of Oil Companies of Serbia (UNKS) thinks that there are no precise data on domestic biodiesel production and that until recently there has been misuse in trading with this fuel.

(Photo: Marija Kambić)

- The only serious biodiesel production capacity, Sid-based Victoria oil, has not been functioning for years. A total of 3.000 tons have been exported i.e. some 3.700.000 liters of this fuel per month which, in most of the cases, was mixed with euro diese land sold as euro diesel. Since sales of this kind of fuel have not been allowed yet, consumers have not been informed. Some sellers, and I responsibly claim that members of Association are not among those, were stealing from the republic budget and they were not loyal competition for oil companies which stick to legislation. Until mid this year,there was no excise tax on biodiesel but sellers in grey zone were charging for it from buyers thus generating huge profit - Micovic explains in his interview for eKapija.

The Serbian Chamber of Commerce and the Association of Oil Companies of Serbia asked for excise taxes. Our collocutors point out that immediately after excise taxes on biodiesel were introduced, bio fuel import was halted.

- Since introduction of biodiesel excise tax as of May 30, 2013, equaled the biodiesel and diesel prices and that the usage is limited only to vehicles producer recommends in certain ratio mixed with diesel of oil origin, owners, i.e.consumers have reduced risk and its purchase but also sales of this fuel. Also,consumers informed themselves on potential advantages and disadvantages of inadequate biodiesel usage - Ljubinko Savic estimates.

The UNKS Secretary General says there is no exact information on gas stations which offer this fuel as well as that we are speaking about not more than 50 gas stations in the country with symbolic turnover.

Although some gas stations advertise and sell biodiesel, the Associationfor Energy and Energy Mining SCC think these are the remaining quantities whichhave not been sold until excise tax was introduced.

Biodiesel control

In most of the EU countries, before they started sales, there were detailed instructions on effects of biodiesel on engine. Apart from that, these countries did not provide sales of 100 % biodiesel at gas stations like inSerbia.

- Biodiesel production will start when systematic obligation of mixing is implemented. Up till then, this fuel will be sold only to enthusiasts. In Serbia, there is no laboratory which can set up all parameters of bio components so therefore, we cannot say we have real quality control system. Therefore, consumers are exposed to breaks in vehicles - Tomislav Micovic, UNKS Secretary General mentions.

Ljubinko Savic, an independentconsultant at the Association of Energy and Energy Mining SCC thinks it isnecessary to set up authorized quality control laboratory as a key to set upregulated biodiesel market.

The National Action Plan for Renewable Energy sources adopted by the Government of Serbia in early June implies gradual introduction of biodiesel in the traffic sector as of 2015. In the meantime, essential bylaws and legislation as well as control mechanism, should be adopted to provide sustainable biodiesel usage.

Gas oil replaces diesel D2

As of August 1, production and sales of D2 diesel fuel was halted so only remaining quantities from some storage can be found at the market.

- The official production and sales was halted but replacement for this fuel is produced 0- diesel fuel gas oil 0,1 which is primarily for the older car fleet, operating machines and agricultural machinery. Sales of this motor fuel will undergo strict controls and it will not be present in all retail shops, especially it will not be sold on the international roads, i.e.highways - the Serbian Chamber of Commerce said for eKpija.

S.O.