Serbia faces fuel tax decision as excise relief ends in November

Serbia’s transport operators, manufacturers and distributors could face higher fuel-related costs in early November if the government lets a temporary 25% reduction in petroleum excise duties expire. The measure was introduced to soften the impact of higher international oil prices, but its expiry would create new uncertainty for business expenses and inflation.

The current relief lowers excise duties on diesel and petrol by about 18 dinars per litre, or €0.15 to €0.16, compared with the statutory rates. The latest government decision keeps the reduction in place through November 1, 2026, inclusive. Unless it is extended again, the standard excise rates would apply from November 2.

Because Serbia also keeps retail fuel prices under a separate control mechanism, a return to full excise duties would not automatically mean an identical jump at the pump. The final retail price would still depend on wholesale fuel costs and the weekly formula used by the authorities.

The deadline comes during a political transition, as the outgoing government is operating in a caretaker capacity after the October 25 parliamentary election. Officials have extended the excise relief several times in short steps, but no further extension had been confirmed at the time of reporting.

Diesel is the main cost exposure for transport firms

The most immediate pressure would fall on road freight and logistics companies, where diesel accounts for a large share of operating costs. Under the temporary measure, excise duty on gas oil is 55.53 dinars per litre, compared with the regular rate of 74.04 dinars. For unleaded petrol, the reduced duty is 54 dinars, versus the statutory 72 dinars.

That difference amounts to 18.51 dinars per litre for diesel and 18 dinars for petrol, before any value-added tax effect. These figures show the underlying tax burden, not a guaranteed change in retail prices.

The issue matters because a transport company consuming 1 million litres of diesel a year would face an extra excise burden of about 18.5 million dinars, or €158,000, if the higher duty were fully passed through and remained in force for a year. Larger operators would see proportionately greater exposure.

Whether that cost can be passed on depends on contracts. International freight agreements often include fuel-adjustment clauses, while domestic contracts may be fixed for longer periods. Smaller firms with limited liquidity and bank loans or leasing obligations would be under particular pressure if they cannot raise prices.

Manufacturing and construction would feel indirect effects

The impact would not stop with the transport sector. Serbian manufacturers rely heavily on road freight to move raw materials, semi-finished goods and finished products across the country and across borders.

Construction companies face a similar risk. Fuel costs affect earthworks, aggregate transport, asphalt production and heavy machinery, while contractors working under fixed-price deals may have to absorb part of the increase. In public infrastructure projects, that can affect claims, variations and final project costs.

Food producers and agricultural businesses also remain exposed. Serbia currently offers a preferential diesel price of 184 dinars per litre for eligible registered agricultural holdings under a separate retail-price arrangement. How much of any tax change reaches farming and food prices will depend on that scheme, as well as refund and relief mechanisms.

For consumers, the broader effect would likely show up through transport and logistics rather than through direct fuel purchases alone. That makes the excise decision relevant not only for companies buying fuel, but also for inflation trends more generally.

Budget needs and energy security complicate the choice

The government also faces a fiscal trade-off. Keeping the excise reduction in place means lower revenue per litre, but it eases pressure on households and businesses. Restoring ordinary rates would improve revenue, but it could add strain to transport-intensive sectors at a time when Serbia is still managing large infrastructure commitments.

The decision is also linked to energy-market stability. Serbia continues to face questions around Naftna Industrija Srbije (NIS), the country’s main oil company and operator of the Pančevo refinery. Any disruption in crude supplies, refinery operations or imports could affect wholesale fuel prices independently of tax policy.

That means businesses are dealing with several layers of uncertainty at once: excise duties, international oil prices, refinery supply and domestic distribution costs. A continued tax relief would ease one part of that pressure, but it would not remove the broader risk.

What businesses will watch next

The government must now decide whether to extend the current relief again, let statutory rates return, or introduce another form of support. The next scheduled publication of regulated fuel prices is on October 30, which will offer a separate short-term signal for the market.

As of the latest official announcement, maximum retail prices stood at 236 dinars per litre for diesel, or €2.01, and 207 dinars for petrol, or €1.76. Those prices apply through October 30 and should not be treated as a forecast for November.

For companies in Serbia, the key issue is predictability. Freight operators, manufacturers and construction firms need clarity on fuel-tax policy before planning contracts, procurement and investment decisions for 2027 and beyond.

With the temporary excise relief set to end after November 1 and retail price controls due to continue until December 31, Serbia’s fuel market remains in a period where government decisions can directly affect operating costs across the economy. Readers can follow related developments in our latest news section.