Due to manipulation, FBiH Government limits oil trade margins

(Patria) - The Federal Government has supplemented the Decision on measures of direct control of certain products and services of interest to the FBiH, which now stipulates the determination of trade margins (calculated prices) for oil derivatives.

This was done with the aim of timely intervention in the oil derivatives market in the FBiH and preventing speculative and extremely irresponsible behavior of all participants in the oil derivatives supply chain during the declared state of emergency due to the coronavirus pandemic.

The Government also adopted a Decision stipulating the determination of trade margins (calculated prices) for oil derivatives. Business companies engaged in wholesale trade of oil derivatives are prescribed a maximum wholesale margin in the absolute amount of KM 0.06/liter of derivative.

Business companies engaged in retail trade of oil derivatives are prescribed a maximum retail margin in the absolute amount of KM 0.25/liter of derivative.

The FBiH Government will, within 15 days from the date of entry into force of this decision, inform the FBiH Parliament about the measures of direct control. The federal, cantonal, city, and municipal market inspectorates are responsible for the implementation and supervision of the implementation of this decision.

The justification for this decision stated that in the past period, there has been a significant decrease in barrel prices on the world market, as well as a decrease in refinery prices of oil derivatives.
However, regardless of the drastic reductions in refinery and wholesale prices in the Federation of BiH market, this has not resulted in a corresponding reduction in retail prices at gas stations. A certain number of gas stations in this period (March-April) reported very high prices and extremely high margins, which reached KM 0.50/liter.

This particularly applies to certain importers/wholesalers, who account for 87.84 percent of the total import of oil derivatives into the Federation of BiH. These companies also own 22 percent of the total 689 gas stations in the Federation of BiH. Regarding retail prices, it has been observed that they consistently have the highest retail prices at gas stations, and there are evident certain patterns in the behavior of these entities regarding price formation and levels, as well as the timing of price changes and the duration of their high level.
The Government today tasked the Federal Ministry of Trade to monitor the effects of the prescribed measure of direct price control by determining wholesale and retail margins for oil derivatives.

In case of absence of the expected effects of direct control, and due to the need for prompt action by the Government of the Federation of BiH in the declared state of emergency, this ministry is tasked with preparing the legally provided model for determining the highest level of retail prices for prompt consideration and decision-making at the session of the Federal Government.